Bitcoin price plunges as Covid Delta variant spreads

[ad_1]

Bitcoin crashed below $ 30,000 (A 40,900), while around $ 40 billion (A 54.5 billion) was wiped out from the overall cryptocurrency market as investors are frightened by the impact of the Delta variant on the global economy. .

The most popular cryptocurrency, bitcoin, fell around 6% to a price of US $ 29,700 (A $ 40,400) on Tuesday, while Ethereum and Dogecoin saw declines of 7% each.

In the US market, shares of airlines, cruise lines and energy stocks have also been hit by fears of an economic slowdown due to the Delta epidemics.

RELATED: Anthony Di Iorio, Ethereum Co-Founder, Drops Cryptocurrency

Tai Hui, chief Asian markets strategist at JP Morgan Asset Management, said the massive sell-off of the global market overnight reflected growing concerns about the spread of the Delta variant across the globe.

“Investors fear that a new epidemic could potentially hamper the pace of economic reopening. The next one to two months will be an important litmus test on governments’ strategy to normalize lives and economic activities amid the threat of the pandemic, ”he said.

“Instead of relying on strict closures and business closures to control epidemics and manage stress on medical services, governments will need to apply a combination of vaccination, monitoring and testing in order to ‘live with Covid’ effectively while limiting economic damage. “

In the United States and much of Europe, progress in vaccination is good, but not quite at the level of herd immunity, he said.

“Nonetheless, those who have been vaccinated should still have good protection against the Delta variant, according to the latest hospitalization and mortality statistics,” he said. “Therefore, the potential risk of economic reopening is manageable, especially in regions or states with high vaccination rates. “

The Australian situation

City Index Australian analyst Tony Sycamore agreed that the spread of the Delta variant rocked global stock markets earlier this week, with investors worried it could lead to widespread lockdowns and impact the economic recovery.

While vaccine deployments would stabilize the situation elsewhere, it was a concern in Australia.

“The slow deployment of the vaccine in Australia has played its part in the current containment, affecting nearly half of the Australian population. Until the vaccination rate is significantly higher, the Australian economy and businesses will remain vulnerable to the Delta and other variants, ”he said.

RELATED: People Who Shouldn’t Invest in Bitcoin

But the cryptocurrency malaise this week is only partly the result of the spread of the Delta variant, as cryptocurrencies are considered a “risky asset” along with stocks, he said.

“However, unlike stocks, bitcoin has been unable to recover from its losses as increased regulatory control continues to weigh on prices and sentiment,” he said.

Regulators around the world are increasingly scrutinizing cryptocurrency, with China recently banning bitcoin mining and Beijing financial firms being restructured to eliminate crypto trading services.

A further blow to bitcoin and other coins occurred last month when China arrested more than 1,100 crypto users on money laundering charges.

In the UK, regulators have banned the Binance trading exchange from carrying out regulated activities in the country, while Japan, Canada and Thailand have also issued warnings regarding the platform.

The big drop of bitcoin

Bitcoin fell below $ 30,000 (A $ 40,900) for the first time since June 22, with the price plunging more than 50% from its all-time high of nearly $ 65,000 (A $ 88,500) in mid-April.

“Bitcoin is the ultimate risky asset right now and it could see intense selling pressure if Wall Street enters panic sell mode,” said Edward Moya, senior US market analyst for online trader Oanda.

But Adrian Przelozny, CEO of Australia’s Independent Reserve cryptocurrency exchange, said that while bitcoin is down 4% today, it has risen 225% in the past year.

“If the large volume flowing through our… office right now is something to do, sophisticated investors see a great opportunity to buy more bitcoin and other major cryptocurrencies,” he said. .

“For those of us who have been in this space for a few years, we already know that bitcoin has its ups and downs. I have a long-term view, focusing on advancing technology and innovation in order to get a feel for the health of the wider ecosystem. With the amount of global venture capital funding supporting projects right now, short-term price drops don’t change my long-term optimism. “

Some analysts predict that bitcoin will trade between US $ 20,000 (A $ 27,000) and US $ 40,000 (A $ 54,000) for the remainder of the year, with the pandemic not being the only thing to hold it back. affected.

[ad_2]