The price of Bitcoin took a beating on Sunday, as traders drove the value down almost 8% in just a few hours. In similar activity, the Dow Jones Industrial Average (DJIA) futures for tomorrow’s opening collapsed by more than 1,000 points. [CNBC]
The price action for both benchmarks revealed a dramatic amount of fear among investors. Growing anxiety over the coronavirus, as well as an all-out oil war between Saudi Arabia and Russia, played substantial roles.
Black Russian
OPEC talks broke down over the week, sparking an oil price war. The events began to unfold as Russia refused a proffered deal by Saudi Arabia to cut production by 1.5 million barrels per day.
In response, the Saudi regime immediately slashed prices for Chinese customers by as much as $7 per barrel. Additionally, the world’s largest oil producer immediately ramped up production by 2 million barrels.
The double punch in response served to indicate to Vladimir Putin and the Russians that the Saudis mean business. The price duel saw already weakened oil prices drop again as the week begins.
Dow, Bitcoin drop
In response, and perhaps connected to coronavirus fears, the DJIA futures saw one of the most dramatic drops to date. Global infections of the virus had risen to over 100,000, and deaths have now reached 3,800.
The fears associated with the virus have effectively curtailed global travel. Airlines and cruise lines have seen substantial losses, as passengers have cancelled tickets in an effort to avoid the virus.
Bitcoin took a major tumble as well, losing a substantial amount as fears over coronavirus drove prices down. While the potential that other forces were affecting the price may be substantiated, the overall market seems to have spoken regarding Bitcoin’s safe haven status.
Gold up
Even as stocks and cryptocurrencies declined, the price of gold rose substantially. The price reached $1,700 per ounce, the highest level since December 2012.