Cryptocurrencies no refuge in market carnage as bitcoin slumps to US$8,000
- Other major digital currencies – ether, XRP and litecoin – also retreated on Monday
- Even with the latest sell-off, bitcoin is still up 12 per cent this year
Cryptocurrencies are not immune to the gyrations rocking global markets, plunging along with a broad range of assets on Monday in the wake of the collapse in crude oil prices.
Asia equities plunged with sovereign bond yields, while currencies swung wildly on Monday after Brent oil prices crashed more than 30 per cent, the second-largest decline on record after the plunge during the Gulf War in 1991.
There is also a bullish argument, according to Chu – that the weakness in the global economy, oil’s collapse and the coronavirus outbreak are helping to make the case for investing in digital assets.
Even with the latest sell-off, bitcoin is still up 12 per cent this year, with much debate within the industry on the potential impact on pricing of the upcoming “halvening” – a scheduled reduction in the mining rate of the coin designed to combat inflation.
“A similarly rapid turnaround and appreciation is equally anticipated on the way to higher levels leading into the halvening,” Kenetic Capital’s Chu said.
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