The coronavirus outbreak is affecting all areas of our lives and a financial crisis seems to be knocking at our door. On March 12, the Federal Reserve Bank of New York announced the offering of $1.5 trillion in loans to banks. These short-term loans are meant to “address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak”.

The distribution of the sum has been divided into weekly batches.

On the same day of the New York Fed’s announcement to inject money into the bond market in their attempt to stabilize it, the Dow Jones industrial average index (the stock market index that measures the stock performance of 30 large companies listed on stock exchanges in the United States) went down by 10%.

The New York Fed also announced that it will buy $60 billion worth of Treasury bonds over the next month, starting with March 13. The problems reported by investors over the past week reminded the Fed about the 2008 financial crisis and that’s why it has decided to act so quickly.

What happened to the crypto market after WHO declared the Coronavirus pandemic

On March 11, the World Health Organization (WHO) declared Covid-19 a pandemic, after considering over 120 000 cases of infection and over 110 countries affected by the spread of the virus.

According to Dr Tedros Adhanom Ghebreyesus, WHO director-general:

“This is not just a public health crisis, it is a crisis that will touch every sector,”

“So every sector and every individual must be involved in the fights.”

One day later, on March 12, the price of Bitcoin lost over $1,000 in value in under 30 minutes and the depreciation continued to values comparable to last year’s prices.

Bitcoin, the most known cryptocurrency lost 50% of its value in a matter of hours, and at some point dipped under the $4,000 benchmark.

By March 13, Bitcoin had recovered some of the lost value, and it was trading at almost $6,000.

Following the March 12 plunge, Bitcoin continued to lose value over the weekend, and the sudden increase in volatility made some analysts reconsider if Bitcoin is or ever was a safe-haven asset.

Other top cryptocurrencies have seen major value losses during the same time.

Is crypto in a bear market?

The stock and crypto markets are in a bear market after the response of the US Federal Reserve to the Coronavirus crisis to diminish interest rates to near zero. The crypto market registered a brief fall after this announcement on Friday, March 15.

Anthony Pompliano, the founder of Morgan Creek, told Decrypt:

“I don’t make calls on short term price movements, but I generally think the Fed’s actions are (a) going to be proven to be ineffective and (b) are bullish for Bitcoin long term,”

This was the second initiative of the Fed to aid confidence in the financial markets.

On Sunday, the Fed Chairman, Jerome Powell, stated during a conference:

“We will maintain the rate at this level until we’re confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals,”

Blockchain to aid the Coronavirus crisis

Timothy Mackey, an adjunct professor at the UC San Diego, has added blockchain solutions to teach on his global health policy course, which has the coronavirus crisis at the core.

The goal is to point out the faulty points in supply chains to health officials and to identify which hospitals from around the world are prepared to treat patients.

Others are trying to profit off the coronavirus crisis publicity and have issued Coronacoin, which destroys coins every 48 hours, based on the number of new global infection cases and deaths.

What are the crypto enthusiasts responding to the Coronavirus crisis