Cryptocurrency prices have surged in the past 24 hours, adding some $14 billion in value to the cryptocurrency markets, which had been vulnerable to massive selloffs as the global economy has struggled due to the spread of the coronavirus. Bitcoin, the most popular cryptocurrency, surged over 10 percent in a 24-hour period, and was trading at $6,597.65 as of 3:09 p.m. HK/SIN.
The gains came after the Federal Reserve announced unprecedented measures to try to boost the U.S. economy, which has boosted investor confidence. The cryptocurrency markets are testing their abilities as safe haven assets as most other currencies buckle under the pressures of global economic closures. It remains to be seen whether these volatile assets will prove popular during the difficult times ahead. According to Coinbase, Ethereum was up 8.54 percent by mid-afternoon on Tuesday. XRP was up 5.30 percent, and Bitcoin Cash was up 7.40 percent.
Oil Prices Also Boosted by Fed Remarks
Oil prices also headed higher on Tuesday thanks to the Fed’s announcement on Monday of new programs to boost the U.S. economy. Also supporting oil prices was the hope of a $2-trillion+ stimulus program to be passed by Congress, though a series of votes in recent sessions have failed to pass the new measures. Republicans and Democrats continue to bicker over details, including a discretionary fund to be divvied by the Treasury Department, as well as the amount of money to be provided to each U.S. citizen. Proposals have ranged from $1,200 per person to $1,700 per person. U.S. Treasury Secretary Steven Mnuchin said on Monday that though the stimulus package has faced some challenges, he expects it to be passed soon.
U.S. WTI futures were up 4.79 percent to $24.48 per barrel, and Brent crude futures were up 3.85 percent to $28.07 per barrel by the mid-afternoon in Asia. A decline in the value of the greenback helped boost prices as well, though analysts expect that the day’s weakening of the dollar was a deviation of the greenback’s strengthening, and that the dollar will continue its uptrend in the coming sessions.
Despite these gains, analysts expect oil prices to continue struggling, especially as global airlines continue to reduce their flight schedules and consumers reduce their spending to adapt to the new global economic realities. Likewise, the expected increase in production from Saudi Arabia and Russia to be implemented in April is expected to push oil prices even lower before they return to their recent levels.