Recent Oil Price Crash Sees the Crypto Market Count $26B Loss

News / 09.03.2020

On March 9, 2020, a report by CNBC showed that the cryptocurrency industry lost more than $26 Billion in a day, after the recent oil prices collapse, which dropped by almost 30%.

Cryptocurrency holders rushed to sell off their stocks after North Sea’s extracted oil benchmark Brent Crude’s futures fell by 34% to sell at $27.34 a barrel, recording its lowest price in four years.

Bitcoin, the leading cryptocurrency by market capitalization, crashed by 8%, together with significant altcoins, including Ethereum (10%), Bitcoin Cash (11%), Ripple (XRP), and Litecoin (10%).

OPEC and Russia’s Contribution to the Oil Price Plunge

According to CNN, the oil and gas industry is experiencing the biggest crash in more than 28 years, since the last crush that occurred in 1991. The oil price crisis, which is fueled by the coronavirus outbreak was sparked on Saturday when OPEC failed to agree with Moscow over cutting production costs for crude oil to compensate for the low demand for oil in China right now.

Leaders from Saudi Arabia’s Organization of the Petroleum Exporting Countries (OPEC), attempted talks with Moscow Russia in Vienna recently to convince Russia to cut back their crude production.

The proposed OPEC cutback was supposed to unsaturate the oil and gas industry with products whose demand from China, as the biggest oil importer in the world, has drastically gone on the low due to the effects of Coronavirus.

Russia’s reluctance to the proposal stems from the fact that the country can wither production cuts better than OPEC members, including Saudi Arabia. Talking to reporters during the summit in Vienna, Russia’s Energy Minister Aleksandr Novak said,

“From April 1 neither OPEC nor non-OPEC have restrictions.”

Is Crypto Still Worth Investing In?  

Bitcoin, which does not usually move in the market as other stocks, has been crashing alongside the stocks ever since the Coronavirus started affecting major economic sectors in the world.

Following the news of the crypto market crash, outspoken Crypto Critic and Economist, Nouriel Roubini aired his views on Twitter. He said that Bitcoin is a much riskier investment than any other risky asset in risk-off periods. He added that when Bitcoin falls, it goes far lower than the latter assets. 

Investor and co-founder of the Blockchain Startup Kenetic Capital, Jehan Chu, defended bitcoin and the crypto market crash at large. The investor told CNBC that treating cryptocurrencies as long-time investment assets, led by Bitcoin, will be the best strategy. Jehan urged people to ignore the current crypto market financial shocks.

Jehan added, “For those who have long term investment horizons, bitcoin is a buy during these dips.”

avatar
Wayne is a Blockchain enthusiast and expert in crypto trading. Currently, he covers trendy issues on digital currencies.