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A View of The Cryptocurrency Market In March

4 min read

The crypto sector has seen one of, if not its busiest month in history. Cryptocurrencies which began nearly a decade ago with Bitcoin were put to the ultimate test in the four weeks. The leader Bitcoin, born out of a recession came face to face with its fame.

The crypto community waited and in its test, it shook out the non-believers and gripped tighter the believers.  To further enliven the situation, this was a month just after fears and confirmation of crypto-related hacks. But not all was negative, it was also just 2 months from its four-year historic event, Bitcoin halving. So how could Bitcoin or indeed the crypto market disappoint?

An Overview Of Jan And Feb

First, the month that ushered in March. In February, everything was relatively calm. The tragic COVID-19 pandemic was still contained in China. And while I say calm, I mean it was the same old problem; crypto exchange hacks and crypto scams. Hackers and scammers were propping up following an explosive start to the year. 

In the first month of the year, we saw Bitcoin jump by over 30% and altcoins reach ATHs with some like ETH doubling their value in the first month of the year. Like every other bullish season, the hackers and scammers were ready to get in on the profits. 

This was confirmed by the hack of the IOTA project wallet, the falling of the FCoin project, and the hack of bZx. There were also some major fears coming from Ledger and Binance. Ledger was first with confirmation that their hard wallet could be hacked in just 15 minutes.

As for Binance, the exchange was undergoing so many scheduled and unscheduled maintenance, there was fear at times, they were hacked. This was causing FUD but CZ Binance, the CEO, was always at hand to calm the crypto community.

The month of Feb was also key for the more than a billion Indians of whom the Supreme court dimmed that cryptocurrencies were legal in the region.

March COVID-19 Outbreak Leads To Financial Turmoil

Entering March, there was confirmation that COVID-19 was spreading across the world. This was beginning to shake the financial world with stock bleeding. The crypto community was certain this was the moment that Bitcoin waited for, for more than a decade. The traditional financial world would burn and Bitcoin would rise from the ashes as the safe-haven asset.

But it failed. Bitcoin was correlating with the stock market. In less than two weeks, Bitcoin had wiped out all its 2020 gains and the same fate was shared by a majority of other cryptocurrencies.

The weak-hearted sold off as Bitcoin reached its ‘bottom’ just below $5K. The believers spun the narrative to give a reason for the plummet. First, there was a need for dollar liquidity with the COVID-19 pandemic. Secondly, a safe haven asset doesn’t rally during the drop but as it comes out of the recession.

As Bitcoin was already at a discount, this was enough to see investors begin to buy again. This easily saw Bitcoin set its lows as its bottom and climb back to the $6K regions. Altcoins followed in tandem and have not looked back since.

In the last days of the month, Bitcoin and the crypto market as a whole has shown relative stability. It has arguably been decoupling from the stock market which was positive for the crypto community.

The U.S and U.K governments have also been unknowingly advocating for Bitcoin with their ‘helicopter’ money. The U.S specifically, passed a law that would see massive corporate bailout and cash handouts to citizens in the trillions of dollars.

By simply printing money and continuing to devalue the dollar, they have proven the traditional financial system’s flaws. The supply is unlimited. Bitcoin, on the other hand, is limited and is set to cut supply in weeks to come.

The crypto community expects that some of this ’helicopter’ money will make it to the crypto market.

It is also in the last few days that Binance has announced the acquisition of Coinmarket cap. The website is the most popular price analysis website which is why it is rumored that Binance paid $400 million.

Crypto Community Outlook

So March was indeed a key test, but looking forward it is as many have predicted, going to get worse before it gets better. A poll conducted by Raoul Pal with over 20K participants showed that just over half of the crypto community expected the next 20% price move would be on the downside.

The margin between the bulls and the bears is however slim. The best take from this is that April could be more volatile than March.

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Cryptomute | 2020