Global Markets Begin COVID-19 Crash
Global markets begin crashing due to COVID-19 pandemic fears, with Bitcoin's price starting to fall from local highs.
On February 27, 2020, Global Markets Begin COVID-19 Crash.
Stock markets worldwide entered steep declines, with the Dow Jones Industrial Average beginning what would become one of the fastest bear markets in history. Bitcoin, which had been trading above $10,000 earlier in February, began falling in tandem with traditional risk assets, declining to around $8,700 by the end of the month.
This correlation with stock market declines contradicted the popular narrative that Bitcoin would serve as a safe haven during economic turmoil. Gold, by contrast, initially rose as investors fled to traditional safe havens, before later declining as well. The market action sparked intense debate about Bitcoin's proper characterization—was it digital gold that would preserve value during crises, or was it a risk asset that would decline alongside stocks?
Critics argued that Bitcoin's behavior proved it was merely a speculative asset with no defensive characteristics. Proponents countered that the sell-off was driven by liquidity needs—as margin calls and redemptions hit investors, they were forced to sell their most liquid holdings, including Bitcoin, to raise cash.