Bitcoin’s price drop today has been one that has not been seen since the coin hit its all time high of $20,000, and then dropped back down, plunging the cryptocurrency into an 18 month bear market. The last time the cryptocurrency dropped anywhere close to 30 percent on a single day was December 22, 2017.

Of course, these are very different circumstances and a very different Bitcoin market. This latest drop comes amid worldwide economic and financial panic, which has been sparked off by the expanding Covid-19 pandemic.

Across the globe, all sectors, markets, assets and commodities are facing huge losses as the global economy goes into shut down and governments try to contain the spread. Bitcoin’s claim to be a safe haven asset is still a viable one, but it has not been proven in this unprecedented occasion, and the coin has not been given the chance due to the serious nature of the economic fear.

Not the end of Bitcoin

While there will be many who point to this day as a disastrous one for the cryptocurrency, and one that could send the growth of the industry back to how things were at the start of the 2018 bear market — this is a very different case.

Bitcoin’s market has grown rapidly since it peaked at $20,000 and then dropped. All of that growth was individual speculation from investors wanting to get into the race. Nowadays, the amount of money needed to move the Bitcoin market is on an institutional level.

Institutional investors have the say as to what happens with the market and while they have been interested when there have been times of greed, they are not in times of fear because to them Bitcoin is still a risky investment and not a proven safe haven.

Investors who have been hit by the Covid-19 pandemic in their financial decisions have also had a say on the Bitcoin market as there is very little interest in trying to make money off of the risky investment. This has led to a fall correlated to traditional market, although not due to correlation of causes.

Bouncing back

It would appear that for Bitcoin to bounce back from this financial uncertainty will take a revival in the stock markets and traditional markets. As things stand currently, there are huge losses being seen there and until these markets come back on track, institutional investors are going to pay no mind to Bitcoin.

It might mean that Bitcoins recovery will take longer than the traditional markets, and in fact, its move to being a safe haven asset could take a back seat. If this will play a role in the designation of Bitcoin will have to be seen, but the market recovery is vital to this.

