- Bitcoin and other top cryptocurrencies were hit hard on March 12 as the Coronavirus sent traditional markets reeling.
- But since then, Bitcoin and the other top currencies by market cap—Ethereum, Bitcoin Cash, Bitcoin SV and Litecoin—have been on the up.
- The steady improvement could be because crypto markets are following traditional markets.
The coronavirus crash, now known as Black Thursday, hit global markets hard in the middle of last month. It was one of the worst crashes since the 1980s. And the global pandemic has caused what the International Monetary Fund calls the biggest recession in 90 years—the worst since the Great Depression.
The market crash, which took place around March 12, ground the cryptocurrency market to a screeching halt, too, much to the disappointment of anyone proclaiming Bitcoin to be a safe haven, akin to digital gold.
Most major cryptocurrencies plummeted in value. Bitcoin, the oldest cryptocurrency and the largest by market capitalization, according to data from metrics site CoinMarketCap, sunk in price from around $7,650 to $4,107. A few days earlier, Bitcoin's price was around $9,100.
But Bitcoin, as well as other major cryptocurrencies that suffered similar fates, have bounced back. In the past 24 hours, Bitcoin hit its highest price since the coronavirus crash, $7,646. Its price has remained (kinda) steady throughout the weekend, tentatively suggesting that the crypto market is on the up.
Good news elsewhere, too! The current price of Ethereum, Bitcoin’s closest rival, is $198, which is roughly equal to the price of Ethereum just before the coronavirus crash. (XRP currently trades for $0.20. It remained largely untouched by the crisis).
Bitcoin Cash, the fifth-largest cryptocurrency by market cap, also recovered. (The fourth crypto, the immensely popular US dollar-pegged stablecoin, Tether, was left out for obvious reasons). The Bitcoin hard fork, whose value closely tracks Bitcoin’s highs and lows, crashed to $147 on March 12—one of the lowest prices it has sunk to since it came into existence in 2017.
But lo! It has since hit new highs, briefly reaching $277 at the start of April and hovering above $240 for the past week. It now stands at a healthy $244 following its halving on April 8.
Bitcoin Cash’s arch-nemesis, Bitcoin SV, also hit historic lows of $103 on March 16—just four days after Black Thursday, when it slumped to $113. The coin has since been on a steady rise, standing at a current price of $197.
Litecoin, the seventh-largest coin by market cap, dropped as low as $30 on Black Thursday. It has since rebounded by over 50 percent—currently standing at a price of $45.
Why the rebound? It could be because crypto tracks global markets, which have markedly improved in recent weeks. And that could be down to massive efforts by governments and central banks, like the Federal Reserve, which has pumped $5 trillion into the economy and cut interest rates to near-zero.
Goldman Sachs analysts wrote last week that "The Fed and Congress have precluded the prospect of a complete economic collapse. Investors have been encouraged by the 'do whatever it takes' approach of the Fed."
Crypto investors ain’t so different from anyone else.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.