The entire past week saw the fears of the omicron variant effect on the markets. There were fears that the new variant could have the potential to derail the global economic recovery and amidst all the drama, the prices of bitcoin remained surprisingly stable. But the scenario changed completely when the weekend struck. Bitcoin, a crypto currency plunged more than 20 percent on December 4, 2021 and is currently trading at $48,000 which is down from $57,000 at the beginning of December 2021.
Marcus Sotiriou, the sales trader at GlobalBlock, a digital asset broker said that there is a constant fear of the omicron variant. Supporters of bitcoin have often boasted about the possibility that the crypto currency could be a safe asset as it trades independently from bonds, stocks and commodities and also provides a potential for the investors who are looking for a balance to their risks. But the recent drop in bitcoin has clearly indicated that the most popular cryptocurrency is indeed linked to other parts of the market.
When the markets pullback, it is a trend that the investment managers get rid of their riskiest assets and not bitcoin has become vulnerable. Jeroen Blokland the founder research firm True Insights while talking to a leading daily said that the cryptcurrency has done what one would expect it to do once the equity sentiment goes down. Sotiriou added that the sell-off of bitcoin was largely due to the institutions to take profits of the crypto currency before the year comes to an end and that was largely driven by the spike in uncertainty.
Overall, the recent crash in the market has given a lesson that bitcoin is not completely insulated from the global markets. It is due to the uncertainty caused by the Omicron variant, a number of investors tried to lock their gains for 2021. Bitcoin can be more vulnerable especially at a time when the omicron variant continues to remain unpredictable.
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