Global financial markets faced their worst day since the crisis of 2008. The fall in most of the major financial indicators worldwide, increased uncertainty within the stock market. In addition, volatility in the price of these assets increased. As Anthony Pompliano says in the tweet of today:
Black monday and volatility
The sharp drop in the price of virtually all financial indexes worldwide, as well as the increase in volatility, was caused by two main elements. The first of them, of course, the continuation of the unfortunate advance of the Coronavirus throughout the world.
This is because there is still no specific cure for this disease and the important economic damage it causes in those countries where it has expanded.
Thus, global supply chains have been interrupted due to Coronavirus. Since, when work activities were suspended in those places where the virus has been declared a state of emergency, the companies in these sites have not been able to produce, seriously affecting the world economy.
Which can be observed in the fall in the demand for oil, which leads us to the second element of importance to explain the black Monday.
We refer to the fall of more than 30% in the price of crude oil in the international market. What happened after the negotiations between OPEC and Russia failed to cut oil production and protect its price. This led to a price war between Saudi Arabia and Russia that has thrown the price down.
In this way, we see how volatility is becoming the main feature of the international financial market today. It becomes necessary to suspend operations on the New York Stock Exchange for fifteen minutes, to avoid that losses suffered by publicly traded assets continue so acutely.
However, this is not a new phenomenon for members of the crypto world. Since we are so used to dealing with the volatility in the price of cryptocurrencies, that changes in the prices of the stock market seem a less interesting phenomenon.
As Anthony Pompliano says in the tweet of the day: “Bitcoiners are not immuted by volatility.”