Following a mass sell-off as markets dropped due to the global coronavirus pandemic, cryptocurrency has rebounded more than $14 billion while bitcoin rallied, gaining 10 percent, according to a Tuesday (March 24) report. Alt coins Ethereum rose 7 percent and XRP was up 5 percent.
The stock markets in both the U.S. and Europe closed out Monday (March 23) lower than they opened, keeping step with the crypto market, which against the usual trend. The market in Asia opened higher on Tuesday following the Federal Reserve’s announcement of an “open-ended asset purchase program” intended to help the markets as the coronavirus spreads worldwide.
“We’re seeing some really bullish bitcoin price action today along with other asset classes after the Fed announced unprecedented measures yesterday to shore up the economy. This has given a lot of confidence to investors,” Vijay Ayyar, head of business development at cryptocurrency exchange Luno, told CNBC.
“It will be interesting to see how bitcoin fares in such an environment, given this is its first test as a safe haven asset in a market downturn and is yet to be proven,” Ayyar added.
Cryptocurrencies plummeted earlier in March, experiencing a mass sell-off on March 8 as the price of oil sank. On March 12, cryptocurrencies lost $93.5 billion in value in one day while bitcoin dropped 48 percent.
The crypto market sell-off aligned with what was happening in the equity market. Bitcoin was always seen as a secure place to put money when the markets were volatile but that doesn’t seem to be the case in this climate. The price of bitcoin is lower than it was at the beginning of 2020.
By the end of last week, the price of bitcoin stood at $5,600 far lower than the roughly $8,000 price that had marked the beginning of the week. It experienced a 30 percent drop, far worse than the mid-teens drop that has marked a broad equity index like the S&P 500.