Plummeting oil prices trigger massive losses in the cryptocurrency market

People rushed off to sell their virtual currency after benchmark Brent Crude futures fell by 34%

Saudi Arabia and Russia spark oil prices plummet after failing to agree on terms for oil production cutbacks.

On March 9, 2020, a report by CNBC shows that the cryptocurrency industry lost more than $26 Billion in a day, after the recent news about oil prices collapse, which plummeted by almost 30%.

Cryptocurrency holders rushed to sell off their stocks after North Sea’s extracted oil benchmark Brent Crude’s futures fell by 34% to sell at $27.34 a barrel, recording its lowest price in four years.

Bitcoin, the leading cryptocurrency by market capitalization, crashed by 8%, together with significant altcoins, including Ethereum (10%), Bitcoin Cash (11%), Ripple (XRP), and Litecoin (10%).

OPEC and Russia Spark Oil Prices Plunge After Talks to Cut Back Oil Production Fail

According to CNN, the oil and gas industry is experiencing the biggest crash in more than 28 years, since the last crush that occurred in 1991. The oil price crisis, which is fueled by the coronavirus outbreak was sparked on Saturday when OPEC failed to agree with Moscow over cutting production costs for crude oil to compensate for the low demand for oil in China right now.

Leaders from Saudi Arabia’s Organization of the Petroleum Exporting Countries (OPEC), attempted talks with Moscow Russia in Vienna recently to convince Russia to cut back their crude production.

The proposed OPEC cutback was supposed to unsaturate the oil and gas industry with products whose demand from China, as the biggest oil importer in the world, has drastically diminished due to the effects of Coronavirus.

Russia’s reluctance to the proposal stems from the fact that the country can wither production cuts better than OPEC members, including Saudi Arabia. Talking to reporters during the summit in Vienna, Russia’s Energy Minister Aleksandr Novak said:

“From April 1 neither OPEC nor non-OPEC have restrictions.”

Are Cryptocurrencies Viable Investments, Considering The Recent Market Plunge?

Bitcoin, which does not usually move in the market as other stocks, has been crashing alongside the stocks ever since the Coronavirus started affecting major economic sectors in the world.

Following the news of the crypto market crash, outspoken Crypto Critic and Economist, Nouriel Roubini took to twitter saying:

“In the meanwhile bitcoin is down 8% on the last day, much more than global equities. Another proof that bitcoin is not a good hedge versus risky assets in risk-off episodes. It actually falls more than risky assets during risk-off.”

Defending bitcoin and the crypto market crash in general, investor and co-founder of the Blockchain Startup Kenetic Capital Jehan Chu told CNBC:

“We can expect more of this volatility sparked by macro health and financial shocks, but ultimately long-term investments in the digital future, and its key asset bitcoin, will be a winning strategy.”

Jehan added, “For those who have long term investment horizons, bitcoin is a buy during these dips.”

Featured image courtesy of Shutterstock.