Coronavirus Sell-Off Siphons-Off a Crypto Investor’s Favorite Fund

Being “decentralized digital” currencies, cryptocurrencies make use of blockchain ledgers for recording and validating transactions. Bitcoin, the first cryptocurrency to be introduced in 2009 was followed by the introduction of more than 900 such currencies to date.

As of March 21^st, 2020, an investor was taken by surprise when he noticed that around 99% of his investment in his selected fund worth USD$250,000 was “wiped out” following the market meltdown due to coronavirus meltdown.

The investor went on to say that he was not aware of what actually happened. Explaining the status of the fund he invested, he said that probable cause of the “wipe-out” might have been due to the fact that although the fund had a leverage position way back in the month of March, however, due to crunch in liquidity and the fact that the sell orders were rejected prevented the cryptocurrency from performing well.

As such, the investment he made lost 99% of its value when the economy started manifesting slowdown due to the coronavirus impact.

 

The coronavirus economic mayhem

The algorithm of the fund plunged when the market nosedived. Although, the managers tried their best to tackle the situation but were met with disappointed due to lack of liquidity and also due to the rejection of sell-orders. This caused the crypto exchange to auto-liquidate positions then.

It may be mentioned here that cryptocurrency exchange, also known as DCE or digital currency exchange allows traders and customers to trade their selected cryptocurrency funds or any other digital asset that they hold and are keen on trading.

 

The scenario of crypto funds during coronavirus impact

During the same period, many investors were caught unaware when many crypto funds and bitcoin news were flooded with facts about how these digital assets or cryptocurrencies shed almost a third of their value and more owing to the pandemic.

An average of 26% on funds were lost and it was recorded as the second-worst loss that occurred since the year 2015. This was confirmed by hedge-fund researcher HFR.

Experts were also of the opinion that the above implication is “an understatement” of the economic bloodbath across the board of digital assets.

As compared to other conventional hedge funds, the digital currencies fell behind in performance. The conventional hedge funds suffered an average loss of 8.4%.

 
However, the scenario is not all that gloomy since thereafter, the cryptocurrency and bitcoin markets have improved remarkably since the mayhem way back in March. As such, cryptocurrencies have registered an upswing of more than 13% in the current year.