Crypto Economy Falls by 8% over New COVID Variant News

In the last 24 hours, the crypto market has plummeted by 8% in value as overnight trading sessions saw the prices of a great number of crypto assets drop significantly. More than $22 billion was wiped out in value of the crypto markets, as the leading digital cryptocurrencies that were in the top 20 list lost somewhere between 6% and 20% of their value. Global markets were shaken up today due to the news of a new COVID-19 variant that was detected and is known by the scientific name of B.1.1.529. The variant was discovered in South Africa and is now spreading to other countries.

While there isn’t a lot of data available about the newly-detected coronavirus variant, it has been reported that there is a possibility it could be more contagious than the Delta variant because it has around 30 mutations, which is quite unusual. As soon as news of the new variant hit, markets in almost every country globally begin to tank and there was a major plunge seen in investments connected to the oil and gas sector. There was a whopping 5.3% decline in the international benchmark for Brent crude oil per barrel. Bitcoin advocate and economist, Alex Kruger tweeted on Friday regarding the turmoil that has been caused in global markets due to the new variant.

Kruger said that there had been some big moves in global markets, which saw crude oil fall, growth stocks crash, rotation return to tech and rates down. The possibility of new lockdowns had driven investors towards safe-haven assets and out of riskier ones. On Thursday in the overnight session, there was an 8% loss in the crypto economy that continued in morning trading sessions on Friday. On Thursday, Bitcoin’s price had been about $58K, but it was down to $54K on Friday morning.

In the last 24 hours, Bitcoin has fallen about 7.9% and its market cap is hovering just about the $1 trillion mark. As far as Ethereum is concerned, it lost about 9.4% in value and on Friday its value was around $4K. The global trading volume today was around $200 billion, while the market cap of the total 11,000 coins in existence lost $22 billion. More than half of the volume recorded is commanded by stablecoin traders with their trading volume in 24 hours around $115.1 billion. Market analysts said that the lurch in global markets had increased the pressure on the crypto space.

They said that because of institutional investment, exit from risky assets has an impact on Bitcoin, no matter what the outlook. The severe sell-off in Bitcoin is risky because it can drag the entire space down. If you look at it from a different perspective, it has become the norm for retail investors to purchase crypto because of coronavirus fears. This means that the actual crypto enthusiasts as well as long-term investors will use this decline as an opportunity to buy the dip because they expect it to go up in the future, if new lockdowns are imposed once more and the traditional investments suffer.