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The general financial market worldwide is currently suffering from the effects of the coronavirus. However, Bitcoin price seems to be boosted by such circumstances.
The global financial market is currently having a terrible time because of the coronavirus. Because there is no control of the virus just yet, the consequent uncertainty is having a terrible effect on the stock market and the global business sector. Yesterday, Coinspeaker reported a crash in global stock markets, specifically with futures on the Dow Jones, Nasdaq, and the S&P 500. A recent eToro note, however, shows that things might be a bit worse.
Highlighting Coronavirus Effects on Financial Market
In an eToro note shared with Coinspeaker, the company’s UK Market Analyst Adam Vettese puts a fine print on just how bad things are.
The three aforementioned indexes all fell at least 1.5% yesterday. Also, the Financial Times Stock Exchanges – FTSE 100 and FTSE 250 – lost more, shedding 2% of their weight as other individual shares began to plummet. The loss on the FTSE 100 was the fourth largest in the last year. The note also says that Monday was one of the S&P 500’s worst days in the same period. Unfortunately, that’s not all.
Both FTSE indexes cover a total of 350 firms. Vettese piles on the bad news, writing that only 8 out of these 350 firms traded positively on the day. Also, of the number, only 2 were able to pull in gains above 1%.
What Players in the Financial Market Were Affected?
According to the note, “travel-related firms” were hit the hardest yesterday. For example, Wynn Resorts lost a heavy 8.1% on the day. Because of travel restrictions and a general fear of infection, bookings reduced, forcing Deutsche Bank to crash its target price for the company.
MGM Resorts and Las Vegas Sands also lost 3.95% and 6.8% respectively. Furthermore, the report notes that Royal Caribbean Cruises suffered a 7.6% loss after it had to cancel a China cruise.
Airlines in the U.S. also felt some effects of the coronavirus. Delta, United and American airlines all shed 3.4%, 5.2% and 5.5% respectively.
The situation in the UK was no different. British Airways parent company the International Consolidated Airlines Group lost 5%. Carnival cruise and the Intercontinental Hotels Group also lost 5% as well. Outside of hospitality and tourism, the Burberry Group and Kaz Minerals lost 4.8% and 6.4% respectively.
Coronavirus Good for Bitcoin?
Bitcoin price has now climbed above $9,000. While it might be a little too early to ascribe Bitcoin’s rise to the coronavirus, it might not be totally wrong. In recent times, investors have slowly begun to see Bitcoin as the proper safe haven in periods of uncertainty. Also, the current unrest in in the traditional financial market has caused investors to start looking at the Bitcoin direction.
There is also a noticeable uniformity between Bitcoin and gold. At the moment, the correlation between the two is now positive. If the virus continues its spread and stocks crash, investors will most likely abandon the stock market in favour of other assets like gold and Bitcoin.