The worst one-day fall in bitcoin in the last seven years

Although the new coronavirus has been illuminating for two months, its extension outside China, with a delay of several days, has caused the fastest fall in bitcoin and other cryptocurrencies in the last seven years. In the middle of the day, the rate crashed 26 percent in a single hour, falling below $ 5,800. By doing so, bitcoin erased all profits this year, reaching May levels last year. Bitcoin's market capitalization is now around $ 100 billion. This made it clear that cryptocurrencies are not (yet) performing the function of safe haven, such as gold, where people would park their savings in difficult times. But it is true that gold was also losing. The same applies to shares. The US S&P index has lost almost ten percent today, as it has all but panic.

Other cryptocurrencies were also moving very closely together, which is basically logical; diversification of assets by buying different cryptocurrencies cannot be achieved. Ether lost a third of its value, as did bitcoin cash and litecoin. In fact, cryptocurrencies are highly aligned, with ever-increasing ones losing 20-30 percent of value. A understandable exception is tether, which has a fixed value against the dollar.

Despite the real fall of bitcoin, it is worth remembering that in the past the cryptocurrency market has gone through many winters and warming. It is difficult to predict whether this is a correction or the start of a longer bearish trend. Bitcoin has so far declined most since December 2017, when it lost 81 percent of its value by November 2018, between June and November 2011, when it lost 93 percent of its value, and between December 2013 and January 2015, when it dropped 84 percent.

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