On March 3, the price of Bitcoin (BTC) rose the most due to speculation that even if concerns about the coronavirus outbreak continue to increase, the Federal Reserve Bank of the United States (Fed) and other central banks will provide support to the market.
Bitcoin jumped 4% after last week’s plunge
Bitcoin rose by 4%, bringing its price to $8,895, and suffered two price drops last week. After falling 14% last week, this is good news for Bitcoin bulls, which is BTC’s biggest weekly loss since November.In the third week of November, Bitcoin Down by about 19%. Similarly, due to fears that the COVID-19 outbreak will lead to a global economic slowdown, investors seem to have avoided the risk, and the stock market also fell last week.
For example, the Standard & Poor’s 500 Index fell for the seventh consecutive day last Friday. This large-scale sell-off caused the five-month rebound to fall from 2,855 to 3,393. However, the index still managed to outperform BTC with a weekly decline of 11%. Despite the decline, BTC is still 20% higher than the S&P 500 and gold so far.
BTC is far from a safe-haven asset
In the past, some investors have touted Bitcoin as a safe-haven asset similar to U.S. Treasury bonds or gold. However, when BTC fell in the same way as many stocks in the market, this safe-haven state was questioned. After global authorities including the Federal Reserve, the International Monetary Fund, the World Bank and the Bank of Japan stated that they could help offset any economic losses caused by the coronavirus outbreak, the sell-off really stopped.
John Todaro, head of currency research at Cryptocurrency Company TradeBlock, said investors are recovering after the massive sell-off last week.He said that the loose monetary policy of the central bank will Support the market, especially the risky stock market, So it can be extended to cryptocurrencies such as Bitcoin.
On Monday, the International Monetary Fund and the World Bank said they would provide emergency funding, technical assistance and policy advice to poor countries with weak health systems to deal with the virus.
Featured image: DepositPhotos©timbrk