Plunge In Oil Prices Triggers Crypto Sell-Off

Cryptocurrency markets plummeted after oil prices crashed and the stock market spiraled into another sell-off frenzy, according to reports on Monday (March 10). 

Oil markets tumbled at least 30 percent after the breakup of the OPEC+ alliance prompted a price war between Saudi Arabia and Russia that is expected to have “sweeping political and economic consequences,” CNBC said.

“As the global oil benchmark plummeted to as low as $31.02 a barrel, Goldman Sachs Group Inc. warned prices could drop to near $20 a barrel,” the CNBC article said.

The collapse will affect big players like Exxon Mobil and smaller entities like shale drillers in West Texas. Oil-dependent countries from Iraq to Nigeria will see a hit to their budgets, and the crash could make countries like Saudi Arabia less influential. The climate change fight could also be negatively affected as fossil fuels become more competitive over renewable energy.

Bitcoin, the biggest cryptocurrency by value, fell almost 10% in 24 hours and closed the week at $8,024, a new weekly low. The DOW, S&P 500 and oil futures crashed as coronavirus fears intensified. 

The drops coincided with the 30 percent fall of Brent crude futures to $31.02 per barrel. Brent crude futures, the international oil benchmark, is at its lowest level since Feb. 2016. 

The stock markets in Japan and Hong Kong also plummeted, along with the other big digital coins ethereum, XRP and bitcoin cash. 

Bitcoin is up around 9 percent year-to-date despite the losses. 

“For those who have long term investment horizons, bitcoin is absolutely a buy during these dips,” Jehan Chu, co-founder of Kenetic Capital, an investor in blockchain start-ups 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.” 

In other coronavirus news, the annual music and culture festival SXSW in Austin, Texas has been canceled due to fears over the spreading of the coronavirus, according to a report by Dallas News.

The festival, which was slated to be held from March 13 to March 21, is intended to bring together musicians, speakers, government figures, comedians and others from all around the globe.