On Tuesday (March 10), confidence returned to the crypto markets after the morning’s pre-market trading data had futures for the Dow, the S&5 500, and Nasdaq all up over 4%.
Monday was a pretty terrible day for both stocks and cryptoassets due to continued panic over the COVID-19 pandemic and the oil price (between Saudi Arabia and Russia) that erupted over the weekend.
Both the Dow and the S&P 500 suffered their worst day since October 2008, falling 7.8% and 7.6% respectively; in fact, the Dow’s 2,013 drop was the largest one-day point drop in history.
Since during times of mass panic people liquidate almost every asset they own based on the belief that “cash is king”, it should not be too surprising that Bitcoin also suffered yesterday, falling to an intraday day low of $7,743 by 17:00 UTC.
According to a report by ABC News, on Monday evening, President Trump and the Coronavirus Task Force held a press briefing at the White House to provide some updates on what the administration is doing and plans to do in order to tackle the spread of the SARS-CoV-2 coronavirus in the U.S.
President Trump said:
“We are going to be asking tomorrow — we’re seeing the Senate, going to be meeting with House Republicans, Mitch McConnell, everybody — and discussing a possible payroll tax cut or relief, substantial relief — very substantial relief — that’s a big number.
“We’re also going to be talking about hourly wage earners getting help so that they can be in a position where they’re not going to ever miss a paycheck.”
The president’s reassuring comments seem to have had a calming effect not just the on U.S. but global markets, and in the past 24-hour period, the Bitcoin price is up 3.29%:
Yesterday, Brian Armstring, a co-founder and CEO of crypto exchange Coinbase, sent out a tweet that suggested he was surprised that Bitcoin is not behaving like a traditional risk-off asset (such as gold) since it is not exhibiting a negative correlation with stocks:
Surprised we're seeing the Bitcoin price fall in this environment, would have expected the opposite.
— Brian Armstrong (@brian_armstrong) March 9, 2020
Crypto journalist and podcast host Nathaniel Whittemore’s reply to Armstrong noted that even gold had not gone up by much during this crisis:
In panicky markets, people sell anything they can that's liquid. It's not just bitcoin – while gold is holding up better it isn't breaking out in the way you might expect.
— Nathaniel Whittemore (@nlw) March 9, 2020
Interestingly, back on February 24, Gabor Gurbacs, Digital Asset Strategist/Director at VanEck/MVIS, commented on Bitcoin’s relationship with U.S. tech stocks and gold:
“#Bitcoin trades 2/3s like a #tech stock and 1/3 like digital #gold.” @JanvanEck3 told me this a few years ago. This is an insightful observation that I found true, especially during big market sell-off days when Bitcoin moves more with tech stocks then the gold-safe-haven trade. pic.twitter.com/NAxaFv7m7u
— Gabor Gurbacs (@gaborgurbacs) February 24, 2020
Another person to comment yesterday on Bitcoin’s “safe haven” status was Ari Paul, the Chief Investment Officer at BlockTower Capital, who said that he was impressed by well the Bitcoin price had held up so far in 2020:
BTC isn't a safe haven (yet). I've always predicted it would decline with a big equity sell off. Frankly, I'm very surprised at how well it's held up. BTC up 7%+ on the year with equities down ~15%. We'll have to see what happens, but darn good performance for a risky asset.
— Ari Paul ⛓️ (@AriDavidPaul) March 9, 2020