Bitcoin Tanks Close to $5000 After the Federal Reserve Cuts Interest Rates to 0%
The global economy doesn’t look to be in a good shape at this moment with the outbreak of the Coronavirus. On Sunday, March 15, the Federal Reserve announced cutting interest rates to 0% and said that it would pump $700 billion as a measure of quantitative easing program.
This stimulus package has been offered to curb the market turmoil caused by the COVID-19 pandemic across the globe. The Fed said: “the coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected. Available economic data show that the U.S. economy came into this challenging period on a strong footing.”
Along with the traditional stock markets, the cryptocurrency markets have also plunged significantly. Within 24-hours of Fed announcing the cuts, the Bitcoin price has crashed 10-15% sharply now trading close to $5000.
At press time, Bitcoin is trading 6% down at $5082 with a market cap of $92.89 billion. Bitcoin’s market cap slipped below $100 for the first time in 2020 during the last week’s market crash.
Bitcoin’s price correction as part of the overall crypto market crash. Along with Bitcoin all other top-ten altcoins have also plunged significantly with the overall crypto market losing $90 billion.
In just a month’s time, Bitcoin has lost around 50% of its valuations crashing all the way from 40% plus returns to negative year-to-date returns. Bitcoin is trading around 30% down from its price on January 1, 2020. This means that Bitcoin price has swung nearly 70% in less than a month’s time.
However-, if you go to check the performance of other cryptocurrencies over the last 30 days, Bitcoin has done relatively better. If you check the WorldCoinIndex chart for 30-day performance, you can clearly see that Bitcoin corrected 50% over the last month while top altcoins like Ethereum Ripple, Litecoin have corrected to the tune of 60%.
Well, the crypto market have performed absolutely opposite to the traditional thinking that it is a substitute for the stock market and cryptocurrencies a substitute for traditional fiat currencies.
Just like the stock markets, we have witnessed a massive sell-off in the crypto markets. In just the last week, the sell-off has eroded 40% of the overall cryptocurrency market cap.