Updated 21:30 GMT
- DOW closes 2,021 points down for the day
- BTC bounces off lows, recoups some losses
Bitcoin Plunges to 2-Month Low
The world’s largest cryptocurrency, bitcoin, fell to a two-month low below $7,700, amid volatility in global financial markets.
The price drop comes during a wider sell-off in global financial markets and drops in oil prices. Some rumours are also circulating of a exit-scam group dumping on the market, we covered this in detail here.
Coronavirus Intensifies Recession Fears
Bitcoin isn’t the only volatile asset to day. Stock markets have crashed globally amid intensifying worries that the coronavirus crisis will cause the global economy to plummet into recession–as factories are shut down, spending is halted, and travel plans are cancelled across the globe.
There are currently more than 100,000 coronavirus cases worldwide, with over 7,000 cases each in Italy, Iran and South Korea.
Global economies have halted amid the spread of the virus. In the worst affected countries such as China and northern Italy, economic activity has all but ceased as entire cities are under quarantine, factories and businesses have been shut down, and workers laid off.
16 million people are under quarantine in Italy’s industrial region as the country struggles to control the outbreak of COVID-19 there.
Even countries that have been so far relatively unaffected by the virus face increasing risks.
Oil Prices Collapse
Oil prices and stock indexes plummeted on Sunday after Saudi Arabia, the world’s second-largest oil producer announced a shocking drop in oil prices—from $6 to $8 per barrel.
Benchmark Brent crude oil witnessed a 30% decline to below $34 per barrel–its’ biggest decline in a 24-hour period since the Gulf War in 1991.
The fall in oil prices has been blamed on a Saudi-Arabian-Russian price war after their failure last week to agree on production cuts to resist falling prices, because of increasing fears that the COVID-19 crisis and measures to contain the virus will suspend world economic growth as cars remain parked and planes are grounded.
“They’re cutting prices, they’re going to increase production. But it’s not clear they’re going to have buyers for that oil,” says energy markets analyst Ellen Wald. “It’s entirely possible that they may not have the wherewithal and the will and the toughness to withstand a price war and a production war with Russia.
Stock Markets Crashes
The Saudi Arabian oil price shocks reverberated throughout financial markets and trading was even temporarily suspended [circuit breaker tripped] on the New York Stock Exchange on Monday in response to the collapse.
The Dow Jones Industrial Average fell more than 1,900 points in early trading—a drop in more than 19% from its peak in February.
The FTSE 100 also fell to below 6,000 points, as S&P 500 futures dropped 5%, and the key 10-year Treasury note saw a fall a record fall to below 0.5%.
Asian and European stocks also saw a sharp fall.