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.