Market’s Risk-off Sentiment Drives Sell-off in Cryptocurrencies Too
Arslan Butt • 1 min read
The worsening sentiment in US equities has had a spillover effect into the world of cryptocurrencies, driving a similar sell-off in Bitcoin lately. Even as European and global stock markets continue their slide, taking cues from the Wall Street, other instruments like precious metals, some currencies and even BITCOIN have been driven lower as investors turn towards cash instead.
The faltering market confidence has affected cryptocurrencies just as bad as conventional financial markets. Other cryptos like Ethereum and Ripple also saw double-digit decline in their value during the past trading session.
Over the previous session, the leading cryptocurrency experienced a 26% decline in value, the sharpest fall seen in seven years, over escalating worries about the economic damage the coronavirus outbreak could cause. The market sentiment had soured further after US President Donald Trump had announced a 30-day travel ban between the US and Europe, which raised fears of possible economic recession and sent stocks even lower.
Over the past few weeks, analysts have observed a sense of panic selling in global markets as investors sell-off assets in a bid to raise cash. Recent data from Lipper indicates that the bearishness in Wall Street caused US money market funds to generate a record high $87.6 billion in the past week till Wednesday.