The rising coronavirus cases in Q1 2020 created uncertainty and panic in the global financial markets, resulting in record drops in major indices. Quite unexpectedly, on March 12, 2020, Bitcoin registered its steepest decline in seven years, reflecting the broader decline in the stock markets, amidst a massive sell-off. The position of cryptocurrencies as a hedge against volatility and economic downturns looked tenuous.
However, in subsequent months, crypto prices climbed higher. By May 2020, Bitcoin trading volume reached a new high since 2018, on major exchanges, at $2-$3 billion per day. By Q2, BTC price was up 34% since the start of the year.
Expert analysts maintain that the decline in the earlier part of the year was only due to the unprecedented nature of the COVID-19 crisis. Traders sought liquidity, amidst the global pandemic, and short-term institutional traders made high value withdrawals out of exchanges. The trends have reversed and BTC has mostly stayed above the $9,000 mark since May 2020, crossing the $10,000 mark on June 2.