Crypto Market Amid The Coronavirus Financial Crisis
Since 2016, there has been an ICO boom, with issuers rapidly raising money from investors looking for capital gains. Unfortunately, most projects never got delivered and due to red tape and risk imposed by regulators like the United States Securities and Exchange Commission, a cryptocurrency market went down between end-2018 and 2019, when new projects found it difficult to execute their ICOs. That was when IEOs were introduced.
Initial exchange offerings (IEOs) as a more attractive alternative to initial coin offerings (ICOs) reduce investment risk among the mass market and raises the industry’s standards, apart from safeguarding investors from scams, which have happened in ICO projects. As a result, during 2019, IEO tokens exploded onto the scene with much hype, and even caused the native exchange tokens for each platform launching new tokens into the market, to increase in value due to rising demand.
Now, as the coronavirus pandemic threatens to push the world into recession, the bill could come due — exacerbating damage to the economy and feeding a meltdown in financial markets including the stock market and the crypto industry. Stock markets took a pummeling last week and they look set for another volatile week ahead, as the implications of an escalating coronavirus outbreak and slumping oil prices spooked investors. The downturn marked a dark time for those with a toe in the market and sparked anxiety, especially among new investors, who had been riding high on continued market rallies over recent years.
With fears over the coronavirus and how it could further decimate the global economy Bitcoin dropped from highs of around $10,500 and, furthermore, the crypto market selloff may continue. While financial experts expect the downturn to continue in the near term, most agreed that markets will recover over the next few months. This situation is far from reality, as of now, and no one guarantees the price of Bitcoin won’t continue to tumble even more, however, we can see China, in particular, has shown positive signs of recovery, having recorded a drop-off in new virus cases over recent days.
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