Invest
Crypto falls as world markets go into lockdown
The consequences of the world going into lockdown and central banks taking unprecedented action is having a negative impact on crypto assets, according to a trader.

Crypto falls as world markets go into lockdown
The consequences of the world going into lockdown and central banks taking unprecedented action is having a negative impact on crypto assets, according to a trader.

According to Apollo Capital chief investment officer Henrik Andersson, the panic that has been seen across financial markets hit the crypto market, although he suggests the pain will be short-lived.
“Last Friday, crypto markets saw a large drop, this seems to have been exacerbated by liquidations of leveraged traders particularly on one exchange, BitMEX. When the dust had settled, it looks like around US$700M worth of positions had been liquidated on BitMEX alone,” Mr Andersson said.
Mr Andersson explained that crypto markets operate 24/7, meaning the market does not have a circuit breaker that traditional assets have.
“This is unlike traditional markets that halt trading during these kinds of events. This likely means that a true market/clearing price is found more effectively in crypto markets as they react quicker, always trade and never halt trading,” Mr Andersson said.
Despite being a traditional hedge, bitcoin was still impacted by the short-term volatility markets are facing.
“For investors looking for an equity portfolio hedge, we have a hard time to find other assets with upside potential outside of gold and crypto. Saying that, we do recognise that both gold and crypto have been terrible hedges so far in this environment but are less than one month since the peak in what has the potential to become a multiyear event,” Mr Andersson said.
However, the crypto specialist believes this will be short-lived, with investors experiencing stronger returns from hedge against traditional assets.
“As the stock markets around the world have panicked, we have seen a run on liquid assets that have performed relatively well. This includes gold and bitcoin. We saw the same pattern in the ’08 financial crises when gold initially sold off to meet margin calls before entering a multiyear bull market.”
“That was just before bitcoin was born. We believe bitcoin and crypto is a hedge against a monetary policy with unlimited money supply. Remember, bitcoin’s supply is cut come May – this is the exact opposite monetary policy of central banks,” Mr Andersson concluded.
About the author

About the author


Cryptocurrency
Ethereum’s all-time high ‘just the beginning’
The latest run for the second-largest cryptocurrency, ethereum, has seen it surge to a new record high, with an analyst stating its record run is “just the beginning”. ...Read more

Cryptocurrency
Bitcoin could surge 100% in 2021, investors believe
While some investors are feeling uneasy after bitcoin more than doubled in value in less than a month, others predict it could hit US$100,000 per coin over the next several months. ...Read more

Cryptocurrency
Aussie brands start transacting with bitcoin
Aussie watchmaker Jacopo Dondi has announced that it’s now accepting bitcoin as payment, having welcomed the world’s most popular cryptocurrency as a sign of its willingness to embrace the unconve...Read more

Cryptocurrency
Top 10 cryptoassets by trades
Bitcoin is still as popular as ever, based on analysis of the trades undertaken by crypto investors across the month of August. ...Read more

Cryptocurrency
5 ways to keep cryptocurrencies safe
Like normal money, cryptocurrencies can be vulnerable to theft, but there are ways to minimise the risks, according to an encryption specialist. ...Read more

Cryptocurrency
Cryptos fail safe haven test
Despite being touted as digital gold, cryptocurrency markets have shed billions of dollars during the pandemic, proving that they are not immune from wider fluctuations in sharemarkets. ...Read more

Cryptocurrency
New gold crypto to blur traditional finance divide
Investors will soon be able to transact in physical gold and digital gold tokens quickly, transparently and easily, thanks to a new digital platform. ...Read more

Cryptocurrency
Why crypto investors should use traditional market strategies
Despite being an alternative asset, many of the traditional equities strategies such as arbitrage and fundamental analysis still apply in crypto, an industry expert has explained. ...Read more

Cryptocurrency
Ethereum’s all-time high ‘just the beginning’
The latest run for the second-largest cryptocurrency, ethereum, has seen it surge to a new record high, with an analyst stating its record run is “just the beginning”. ...Read more

Cryptocurrency
Bitcoin could surge 100% in 2021, investors believe
While some investors are feeling uneasy after bitcoin more than doubled in value in less than a month, others predict it could hit US$100,000 per coin over the next several months. ...Read more

Cryptocurrency
Aussie brands start transacting with bitcoin
Aussie watchmaker Jacopo Dondi has announced that it’s now accepting bitcoin as payment, having welcomed the world’s most popular cryptocurrency as a sign of its willingness to embrace the unconve...Read more

Cryptocurrency
Top 10 cryptoassets by trades
Bitcoin is still as popular as ever, based on analysis of the trades undertaken by crypto investors across the month of August. ...Read more

Cryptocurrency
5 ways to keep cryptocurrencies safe
Like normal money, cryptocurrencies can be vulnerable to theft, but there are ways to minimise the risks, according to an encryption specialist. ...Read more

Cryptocurrency
Cryptos fail safe haven test
Despite being touted as digital gold, cryptocurrency markets have shed billions of dollars during the pandemic, proving that they are not immune from wider fluctuations in sharemarkets. ...Read more

Cryptocurrency
New gold crypto to blur traditional finance divide
Investors will soon be able to transact in physical gold and digital gold tokens quickly, transparently and easily, thanks to a new digital platform. ...Read more

Cryptocurrency
Why crypto investors should use traditional market strategies
Despite being an alternative asset, many of the traditional equities strategies such as arbitrage and fundamental analysis still apply in crypto, an industry expert has explained. ...Read more