The World Health Organization (WHO) Director-General Tedros Adhanom Ghebreyesus has observed the stock and Bitcoin market responses to the coronavirus and concluded that there is much irrationality afoot.In a statement made during the King Salman Humanitarian Aid Center’s International Humanitarian Forum in Riyadh, the director cautioned investors, “Global markets…should calm down and try to see the reality. We need to continue to be rational.” Meanwhile, global stock markets saw massive reductions last week, and analysts predict more of the same this week. Additional pressure on stocks and other assets could be caused by ‘Super Tuesday,’ as the Democratic party nominates its next candidate.
Bitcoin Slips and Slides
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Bitcoin has, so far, responded in a similar way to stocks and other investments. Last week saw the price decline by nearly 20% on coronavirus fears, and the weekend moved the price to hover around $8,500. This is a massive downturn for BTC after posting fresh 2020 highs during the two weeks previous. Such massive movements are not unusual for Bitcoin or cryptocurrencies in general but came as a surprise during a period that many would have considered a ‘buy’ season. Analysts had thought that global scares like the new virus would push investors into Bitcoin instead of out. However, the intricacies of the digital currency’s substantial foothold in China likely played some role.
Coronavirus Being Overblown?However, according to the WHO, while the virus is certainly something to be contained, the dramatic response is ‘irrational.’ In fact, Ghebreyesus was quick to rebuke the markets for going overboard in a panic. The WHO will undoubtedly work toward full containment. However, the statement that the global markets had been irrational is very telling about how serious the virus truly is. Should the markets discover that the dangers are less than previously thought, buyers could rush back in. In that case, the buying pressure for Bitcoin would likely return with a vengeance. The coin is approaching the much-anticipated third halving. In such a case, the current values would be considered remarkably cheap — a fact that should help investors consider their buy and sell choices more carefully.
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