It is undeniable that the coronavirus is having serious consequences on the markets as well. Many offices are closed and employee travel is banned; the Italian stock market is losing more than 3%; the Btp-Bund spread is at 180, while banks are suffering even more than securities.
In this scenario, the consequences are also affecting the cryptocurrencies that in recent days marked new declines, despite the fact that this is the first time that a factor external to the markets like a social-health crisis impacts the economic context.
Fortunately, compared to recent days, equity markets are recovering: the Dow Jones is at +5.10% today, while cryptocurrency volumes are rising again with +40% of daily trading from yesterday morning’s levels and with Bitcoin marking +2.5%.
Even eToro yesterday reported that short positions are rising +10% in view of accumulation but also to reduce the volatility of the total portfolio.
Edoardo Fusco Femiano, Market Analyst at eToro in Italy, said:
“In response to the strong correction in the last few days, two phenomena are being observed. The first sees investors increasing short positions, mainly to hedge bullish positions and reduce overall portfolio volatility. Short positions have increased by 10% over the past week, with the most traded indices being the S&P 500, DAX 30 and Dow Jones. The second phenomenon refers to the more patient investors, who have been showing a slow accumulation of bullish positions on American blue chips, such as Apple and Microsoft, and also on Bitcoin, despite price declines. In general, despite the volatility, people continue to look for long-term value, aiming to contain the high volatility of this phase. It should also be noted that the CBOE volatility index, also known as the fear indicator, has reached the highest level since 2011″.