It looks like the corona crisis doesn’t have a cure, at least for now. If the endgame from last March was about superheroes going toe-to-toe with someone who lacks pathos, this year coronavirus has come up as Thanos for cryptos. On March 12, it seems like he snapped as 50% of bitcoin’s price crashed and went into oblivion. It’s safe to say that this is not what bitcoin freaks meant when they talked about bitcoin halving! Bitcoin’s safe haven credibility also succumbed under pressure.
Why Bitcoin’s Price Crashed & Faltered so Badly From The Altitude of Double Digits?
It’s fairly surprising to see why bitcoin’s price crashed. As the top traditional markets were toppling, it appeared like the stage was set for bitcoin to take over and prove its mettle as a safe haven. Safe haven textbook definition states “it is an investment which people switch to in times of unprecedented instability and extreme volatility.
A loose translation of that would be it’s people’s La La Land, a guardian angel from heaven when hell is being rained down in the traditional assets of the stock streets.
But How Bitcoin’s price crashed was remarkable and hard to fathom This was the test which bitcoin needed to pass with flying colours, but it failed. Bitcoin’s price crashed and it sucked the life out of the safe-haven claims.
Is the Bull Market Prior the Bitcoin’s Price Crash to be Blamed?
It was all sunshine, rainbows and unicorn in the crypto space before coronavirus said ‘Hi’. The bull market painted a very pretty picture, and it was all hunky-dory. But then almost all cryptocurrencies crashed like bitcoin If the first three months were as smooth as the painting of Mona Lisa, what followed on March 12 was like a lion ripping off a gazelle.
The bitcoin price was constantly on its way up, touched its highest point a few weeks before coronavirus knocked the wind off its sail—the bull market kind of contributed to such a devouring collapse. The community made a remarkable profit in the start, and they went to safeguard it at any cost. This led to a massive sell-off, and subsequently, bitcoin’s price crashed.
Kehan Zhou, the Chief operator from wall strategies, stated “We were in a bearish market, this may have fueled the sell-offs that have occurred over the last several weeks. Many investors have profits that they want to protect, which led to a quick sell-off at the first sign of a recession”.
Just a Sucker Punch, Not a Cou-de-Grace
One interesting perception around why bitcoin’s price crashed and it’s shaken status of bitcoin as a safe-haven is that it has transformed in the eyes of the people. It is everything and nothing at the same time. For some, it’s a commodity, a safe haven, and for a few, it is currency. As a currency, it’s slow, by the time you pay by it at Starbucks, your hot espresso would go cold. The safe-haven symbol has taken a beating too.
Interestingly, now it appears more and more as just another financial asset. Over time, bitcoin has been utilized as an investment in hedge funds and other professional trading desks. This would explain why bitcoin’s got trampled as investors made their way out, just like any other financial asset.
The bitcoin price crashed painted a new picture of bitcoin as just another financial asset which people dumped off in times of need. It has been one hell of a ride for bitcoin which started off so humbly at the grand prize of $0! Initially, it possessed no suitors except people who had unflinching faith in it. Experienced a meteoric rise, turned into a currency, then commodity, a safe-haven and finally a financial asset. If you ask me well, I’d say this isn’t its final form and what the future holds for bitcoin would unfold soon as we keep our eyes glued on the beckoning metamorphosis.
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