The month of March is going to go down as one of the most eventful and erratic months in cryptocurrency history. From the legalization of cryptocurrency in South Korea and France to the coronavirus pandemic outbreak, the month of March will be one to remember.
In this article, we provide the reader with an insightful overview of the factors that influenced the crypto space and prices in March 2020.
The Effects of the COVID-19 Pandemic and Oil War On Crypto Assets
Just as with every other financial/equity market, the cryptocurrency industry gave-in to the economic crisis currently plaguing the world and recorded one of its sharpest decline in price in history, with Bitcoin losing as much as 52% in just two days.
Bitcoin (BTC), the largest cryptocurrency by market cap, plunged below $4,000 in March, following the US Federal Reserve Bank’s announcement that it intended to cut interest rate by a hundred-basis-point. It is believed that the prevailing oil war, which has caused the global oil market to crash, and the COVID-19 outbreak greatly influenced the crypto market crash that was witnessed this month. This crisis caused panic in crypto traders and investors, which triggered a sell-off that inevitably led to the crypto market crash.
Digital assets across the crypto space also recorded significant declines. For example, Ethereum (ETH) dropped by about 25%, Bitcoin Cash (BCH) dropped by about 30%, Litecoin by about 23%, and Ripple by 17%. Altogether, the crypto market lost about $100 billion, bringing its total market capitalization down to about $170 billion at press time. Bitcoin’s drop primarily influenced the crypto market crash as it dominates over 60% of the total market share and is a strong influence on other digital currencies.
Many experts believe that the sell-off witnessed in the crypto sector was triggered by global stock exchanges crash. Investors are now moving to less risky assets like gold or safe-haven currencies like the Japanese Yen and the Swiss Franc.
Sadly, as of time of writing the COVID-19 pandemic outbreak has affected over 3,000,000 people and has killed more than 200,000. The virus has been recorded in 196 countries in the world. Unfortunately, some people have seen this crisis as an avenue for perpetrating scams. It was reported that some scammers have begun impersonating the World Health Organization to swindle unsuspecting victims of their BTC donations. These scammers mislead people into sending in BTC donations to them while thinking they are sending it to the WHO’s COVID-19 Response Fund. WHO has warned that interested donors should always verify links and directives asking for donations to avoid falling for these scams.
Also, the global oil price has crashed to multi-year lows following an unexpected fallout in the OPEC alliance. Analysts worldwide agree that there probably won’t be a prolonged decline in the prices of digital assets, which are expected to rebound in the coming months gradually.
Other Global Factors That Affected Crypto Prices in March
On a brighter note, here are some factors (political, economical, social, technological, environmental, and legal) that influenced the global crypto space this month:
1- India’s Supreme Court has uplifted the ban initially placed on cryptocurrency trading in the country by the Reserve Bank of India in April 2018. The ruling was passed on the 4th of March and sparked frenzied excitement in the crypto community.
2- Cryptocurrencies have become completely legal in South Korea as the amendment to the Special Reporting Act got approved by legislators in the country on the 5th of March. Exchanges in the country have been implored to obtain licensing before making crypto assets available to the public.
3- French authorities, on the 6th of March, announced that they had legalized Bitcoin as an acceptable form of money in the country. Bitcoin use in France is expected to witness a surge in the coming months.
4- Germany has also officially announced, on the 2nd of March, that cryptocurrencies are now recognized as financial assets in the country.
5- The United States Treasury met with cryptocurrency experts and industry leaders on the 2nd of March to discuss cryptocurrency regulations in the country. The regulatory talks included curbing crypto scams, terrorism financing, and money laundering in the country.
6- Walmart, along with eight other companies, has entered a partnership with HyperLedger. The new development was announced on the 3rd of March at the HyperLedger global forum in Arizona. The blockchain company asserted that this alliance would bolster the production of more user-friendly blockchain technology.
7- Coinbase and Messari have joined the list of blockchain-related companies that have mandated their workers to work from home to prevent the spread of the deadly COVID-19 pandemic.
While it is believed that the crypto market will recover from the crash and record new highs, many still believe that the bottom of the global crisis-induced downtrend is yet to be recorded.
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