Bitcoin price drops below $55,000 for the first time in the past 30 days.
Bitcoin, ETH, XRP and XRP prices have dropped over 6 since news of a new Covid strain broke out.
The strain was identified in South Africa and global markets, and equities have tanked.
Over $265 billion was wiped off the overall crypto market within an hour of the news; cryptocurrencies are now trading at a steep discount on Black Friday.
If fear and uncertainty grow, governments may likely reintroduce lockdown restrictions that stress the economy, analysts say. If that happens, it would be a sign that the economy will be in a state of instability.
The decline implies that cryptocurrencies are yet to be accepted as a safe haven during unprecedented times, says an investment director at AJ Bell’s Russ Mould. Mould, a cryptocurrency analyst, believes that traders are currently pricing in higher odds of low liquidity. If there is a shortage of liquidity, it will be difficult to rely on low-security measures to protect investors, he says. If it continues to grow, it is possible that governments may need to crack down on Bitcoin, he said.
Bitcoin enters bear market territory as risk assets plunge on new Covid variant
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