- More than $265 billion of total cryptocurrency market capitalization was wiped out in a bloodbath as news of the new Covid strain broke.
- Bitcoin, Ethereum, and XRP are down more than 6%, with the top 10 cryptocurrencies trading at steep discounts.
- A new Covid variant identified in South Africa has prompted liquidations in the cryptocurrency and stock markets.
As news of the new Covid variant spread, asset prices in the cryptocurrency and stock markets plummeted, with bitcoin dropping below $55,000 for the first time in the past 30 days.
Crypto bloodbath continues as Bitcoin, Ethereum and XRP prices drop
Bitcoin, Ethereum, and XRP are down more than 6% since news broke of a new Covid strain. Pressure was set in South Africa and global markets, and stocks fell.
More than $265 billion wiped out from the total crypto market within an hour of the news; Cryptocurrencies are now trading at a huge discount on Black Friday.
The asset’s price fell below $55,000 for the first time in over a month. The price of Ethereum fell more than 9%, and the Bloomberg Crypto index (which is considered a benchmark for the performance of cryptocurrencies against the US dollar) fell by 4%.
News of the new Covid variant spurred divestitures across European, emerging markets and global equities.
Ross Mold, chief investment officer at AJ Bell, believes that the new strain of Covid is responsible for the bloodbath in the cryptocurrency market. Mold told Forbes magazine,
Forget Black Friday. Red Friday has been renamed Red Friday after the color of stock price screens as stocks fall globally amid fears of a new Covid strain.
Proponents believe investors’ reaction to the news of the Covid strain is a classic risk-averse measure. If fear and uncertainty grow, governments will likely re-impose lockdown restrictions that are putting pressure on the economy.
The drop in the price of Bitcoin, Ethereum, and XRP indicates that cryptocurrencies have not been accepted as a safe haven during unprecedented times.
Alex Kruger, a cryptocurrency analyst, believes that traders are currently pricing with higher odds of lower liquidity.
Global markets are freaked out today by this new type of covid virus. Big moves across global markets. Growth stocks are falling, crude oil is down, rates are down, and the rotation is back in technology. Traders are pricing in higher probability of renewed closes in low liquidity conditions. It’s okay, there is no Covid in the metaverse https://t.co/WF1Zv4pfxM
– Alex Kruger (@krugermacro) November 26, 2021