Experts blame Wall Street crash for Bitcoin price drop

Global Financial Markets and Wall Street, in particular, experienced one of its worst periods when major financial markets experienced severe slump towards the end of February, with Bitcoin also included. The S&P 500 had its quickest ever correction, with other major indexes suffering as well. Bitcoin also shelled a lot of value, and Michael Novogratz has blamed the fall of Bitcoin’s price to events in the financial markets.

Major markets affected

Most major markets have had some serious slump, with S&P 500 shedding 12% since February 19th, which makes it the fastest correction in history. And the crypto market is not showing any signs of recovery after the price crash caused Bitcoin to shed about $1,000 in value within the past 24 hours. Bitcoin Cash, Ripple, and Ethereum even had bigger losses, as market analysts are still struggling to find the right explanation regarding the cause of the crypto market slump. And the continuous spread of COVID-19 (Coronavirus disease) has not helped matters as the business environment has been threading under caution since its outbreak in China. Italy, Iran, and South Korea are other seriously affected countries, with increased fears that the virus could spread to Western Europe as well. But amidst all these negativities in the market index, the 0.66% increase of NASDAQ futures prices will be seen as good news. Other major markets experiencing a similar downturn include Nikkei 225, NASDAQ 100, and FTSE 100.

Bitcoin bucking the trend

Several financial analysts have pointed out that Bitcoin does not follow the trends going on in traditional financial markets. Mike Novogratz, who is a popular Bitcoin permabull and a former hedge fund manager at Wall Street, said Bitcoin has followed the trend this time. He said that one of the major causes of Bitcoin’s decline was the fact that many investors took their leverage to gain some profits as the financial crisis continues. He further stated that in the past when the mainstream financial markets are experiencing a downturn, Bitcoin and other cryptocurrencies were usually used as leverage to wedge against their risks. But this time, the investors are taking down their leverage even from Bitcoin, which has badly affected the price of the digital coin.

Different opinions on Bitcoin crash

Other analysts have blamed the Bitcoin price crash on the abandoned cryptocurrency launching project of Goldman Sachs. But it has been suggested that the incident could not be the major reason for the crash. Another industry analyst, Alex Saunders, said that if Bitcoin will ever grow from what it is today, it needs to be entirely uncorrelated with other financial markets.