There has been no direct connection between the Coronavirus outbreak and crypto market correction but the signs are there. The crypto crash is accelerating as investors start to panic, a flurry of fake news on social media is not helping matters.
Crypto Markets Crushed
Crypto currency markets have lost a whopping $50 billion since the beginning of the week as the selloff accelerates. In the past 24 hours alone total market capitalization has dumped another 7.5% to $240 billion as this year’s gains go up in digital smoke.
Bitcoin has fallen through several key support levels, the last one being in the high $8k range. Its next big test is a hold of heavy support at $8,300. Failure to do this will likely result in complete capitulation for the majority of altcoins.
At the time of writing BTC was holding the $8,700 level where it was this time last month. The rest of the market though has dumped hard with Ethereum dropping another 9% and several of the others dropping double digits for the second day in a row.
The correction so far stands at around 18% for bitcoin so it could have further to fall. As usual the BTC detractors are posting with glee today but the fact remains that this is all still perfectly normal for crypto markets regardless of the Coronavirus (Corvid-19) outbreak.
Fake News Epidemic
It appears that fake news is spreading faster than the virus itself and as usual, social media is its epicenter. Facebook, which is a hotbed for misinformation, has recently introduced measures to block any adverts related to or even mentioning Coronavirus. A company spokesman told Business Insider;
“We recently implemented a policy to prohibit ads that refer to the coronavirus and create a sense of urgency, like implying a limited supply, or guaranteeing a cure or prevention.”
It has been widely reported that China, the epicenter of the outbreak, has clamped down on all forms of media and what the authoritarian state decides to release to the public.
The BBC added that YouTube has also become a hothouse of high traffic fake videos attracting advertisers that profit its owners, Google.
Some wild conspiracy theories, including a link to China’s 5G rollout which also began in Wuhan, have been posted on the video upload platform. There have also been reports that the virus was engineered in a Chinese lab as part of a bio-weapons program.
None of these have been verified yet but they still pervade social media which profits from them. Global investors are worried and most major assets are falling at the moment, crypto currencies included.
Is the Coronavirus responsible for the crypto crash? Add your comments below.