Crypto markets lost over $26 billion due to the oil price war

The cryptomarkets got in turmoil this morning after a sharp drop in oil prices sent waves through the global financial markets.

The cryptocurrency markets got in turmoil on Monday morning after a sharp drop in oil prices sent waves through the global financial markets.

Over $26 billion were taken off the crypto markets in response to a violent drop in oil prices, caused by a sudden price war within the OPEC members, Saudi Arabia and Russia.

The Bitcoin (BTC) went down over 10% during the weekend, reaching the price of $7,774 on Monday morning, the lowest one since January 10th, when traded for $7,766. The closing price of Bitcoin (BTC) last Friday was still over $9,115.

Almost all major altcoins also declined. The biggest digital coins like Ether (ETH), Ripple (XRP) or Bitcoin Cash (BCH) suffered a loss of up to 20%, as ETH tested the $200 support area, XRP – $ 0,200 and BCH dropped to $264.

The cryptocurrency sell-off followed the collapse in oil prices, which dropped over 30% driving to their lowest level in four years. The situation escalated after the global traders braced for Saudi Arabia to flood the market with crude at unprecedented price discounts, according to the Financial Times.

The conflict between Saudi Arabia and Russia sparked last week when both OPEC members failed to agree on production cuts to compensate for the weaker global demand caused by the coronavirus outbreak.

Since Moscow refused to further reduce oil production, Saudi Arabia, the world’s leading oil exporter, has cut its oil prices the most in the last 20 years.

Dips are the opportunity

The volatile movements in cryptocurrency prices are not unusual through. Since the coronavirus is slowing the growth of the global economy and bringing more volatility to the reactive markets, it also carries an opportunity for long-term investors.

Jehan Chu, the co-founder of a blockchain startup investor Kenetic Capital earlier told the CNBC, that for long-term investors bitcoin is absolutely a buy during such dips. He also added that “we can expect more of this volatility sparked by macro health and financial shocks, but ultimately long term investments in the digital future, and it’s key asset bitcoin, will be a winning strategy.”


This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia