Bitcoin (BTC) Price Drops Together with Stock Futures as Trump Bans Flights from Europe

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Thu, 03/12/2020 - 06:23
Alex Dovbnya

The price of Bitcoin (BTC) continues to move in tandem with U.S. stocks, thus acting like a risk-on asset

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Contents

The Bitcoin (BTC) price nose-dived four percent with U.S. stock futures on the news that President Donald Trump suspended travel from Europe.

The price of the leading cryptocurrency dropped to $7,561 but managed to slightly recover.

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During his national address, Trump banned all flights from Europe for thirty days. Such a radical effort is supposed to prevent the spread of the coronavirus in the U.S.  

Even though Trump clarified that the restriction didn't apply to goods, Dow Jones futures and S&P 500 futures are still down by more than three percent after the two benchmark indexes plunged into a bear market on Wednesday. 

Meanwhile, Chicago-based CME Group, which launched Bitcoin futures in late 2017, is expected to close its trading floor to prevent potential infections.    

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Bitcoin react to Trump's travel ban

Despite a popular belief that BTC is uncorrelated, it continues to plunge together with stocks. Economist Alex Krüger claims the cryptocurrency is currently trading as a risk-on asset

John Melas-Kyriazi of Spark Capital notes that BTC is heavily correlated to the equities based on its one-month performance.  

Hence, it's safe to say that BTC is not counter-cyclical as of now, but things could change when central banks start printing even more money, according to BlockTowerCapital CTO Ari Paul

 

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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