It’s no secret that 2020 has been a rough year for the world, kicking off with raging fires in Australia and heightened political tensions within the Middle East, followed by the rise of a deadly virus that has put the world economy on the brink of a recession, also causing nascent markets like crypto to the tank.
This economic downturn has been unprecedented, with the U.S. stock market’s benchmark indices all seeing declines emblematic of those incurred during major recessions.
The magnitude of the value that major corporations have lost as a result of the ongoing economic decline has been staggering, and it also elucidates just how tiny the crypto markets truly are.
Coronavirus destroys the global economy, creates far-reaching shockwaves
The Dow Jones, which is looked upon as the benchmark index to gauge the health of the global economy, has declined by over 30 percent during the past one-month period, plummeting from highs of nearly 30,000 in late-February to lows set today at just above 18,000.
This massive decline has come as the lethal Coronavirus spreads at a rapid rate on a global level, leading massive cities across the globe to go on lockdown, sending unemployment skyrocketing while retail-driven businesses shutter.
The impacts of the virus-induced economic downturn have been far-reaching, also leading small markets — like crypto — that is fully detached from the traditional ones to see massive declines.
Bitcoin — the benchmark cryptocurrency — plummeted from its 2020 highs of $10,500 to lows of roughly $3,600, which is where it was able to garner some support that has led it to climb back into the $6,000 region.
Recent stock market selloff shines a light on just how tiny crypto truly is
It is important to note that the recent stock market selloff has led some major companies to see market cap losses as high as $100 billion or more.
Michaël van de Poppe — a popular analyst — explained that Apple’s market cap has already declined by over $400 billion from its year-to-date highs, which is over double the size of the entire crypto market’s capitalization.
“The Dow Jones Index is down 38% in one month. Just one month. Apple lost 34% and about 400-500$ Billion in value. In just one month. Crypto market capitalization; $180 billion. We’re just still so tiny and early. But digital cash & crypto are the future.”
This shows just how small the market truly is, and how much immense room there is for growth in the future.
If Bitcoin and other digital assets are able to capture even a fraction of the size of the traditional markets, they will see parabolic growth similar to that seen in years past.
The post Economic downturn erases trillions from stock market and shows just how tiny crypto truly is appeared first on CryptoSlate.