Name Price24H (%)
Bitcoin (BTC)
$11,696.04
2.00%
Ethereum (ETH)
$378.07
0.56%
XRP (XRP)
$0.245059
1.23%
Litecoin (LTC)
$47.85
1.26%
Cryptocurrency markets crash on back of COVID-19 pandemic ef...
NEWS

Cryptocurrency markets crash on back of COVID-19 pandemic effect

The on-going COVID-19 pandemic, oil price war, and global stock markets shock continue to fuel panic across the globe. Global stock markets, futures, and crude oil prices dived successively. Under tremendous selling pressure, the cryptocurrency market was not immune. Just a month after the price of BTC reached $10,502, a new high in months, on Feb 13, a plunge in cryptocurrencies prices suddenly swept the entire market on Mar 13. The benchmark crypto fell dramatically by more than 44% within a few hours, reaching a low of $3,791.9. Then, the price rebounded slightly to about $ 5,000.

The crash was not limited to Bitcoin. According to CoinMarketCap data, the world’s top ten cryptocurrencies by market cap all fell by more than 30%, except USDT, the only stablecoin among top 10.

The sudden price drop is not only a shock to the market, but also a challenge for crypto exchanges. Facing a sudden influx of users to sell off and hedge, exchanges’ market depth and trading system capacity were put under test, and the key to win the game is their liquidity and technical capabilities. Traders, who are the end users of their services, will also vote with their feet.

Performance varies across crypto exchanges

Under extreme conditions, many exchanges, even the very top ones, experienced problems at different degrees. For instance, one of the leading exchange had its the spot depth push delayed and the futures trading system overloaded during the crash.

Apart from that, some exchanges experienced server errors or even downtime in futures and OTC trading for a period of time. Also, some other exchanges were exposed the problem of depth, which is not as good as what they claimed to the public. Even OKEx, an exchange which is known for its system security and stability, encountered a minor problem like app lag.

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Fortunately, most problems were solved quickly. However, those incidents have been printed in the mind of traders and will influence the latter’s choice of exchange in the future.

It isn’t the end game of crypto

Given the current unfavourable macro-economic environment worldwide, it is not surprising to see crash in the cryptocurrency market. However, it won’t be the end of crypto. Governments are actively introducing corresponding fiscal policies to respond the situation, which will have positive impacts on the crypto market.

For instance, the Supreme Court of India has rejected the previous ban on financial institutions from providing banking services to cryptocurrency companies from the Reserve Bank of India. In addition, traditional industries are also actively exploring the possibilities of blockchain. Therefore, the blockchain’s financial inclusion and even mass adoption are still worth looking forward to.

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