The COVID-19 pandemic has put a toll on the crypto market, which close Q1 2020 at a 5.03% loss, according to CoinGecko’s newly released Q1 2020 quarterly cryptocurrency report.

2020 started strongly with the market rallying to nearly US$300 billion in capitalization, but global markets uncertainties resulting from the COVID-19 outbreak and the crude oil price war wiped off all gains made at the start of the year, the report says.

The crypto market began declining in mid-February before crashing in mid-March. In particular, March 12, saw the market loose 40% of its capitalization in what traders now call Black Thursday. Bitcoin (BTC) lost a massive 40% in that single day and touched a low of US$3,800, while Ethereum (ETH) declined by 45%, reaching a low of US$86.

Among the top five cryptocurrencies by market capitalization, the research found that BTC was the biggest loser in Q1 2020, recording a 11% decline. BTC is followed by XRP with a 10% loss.

On the other end of the spectrum, Bitcoin SV (BSV) was the biggest gainer in Q1 2020 with a 70% price increase. This came as rumors spread that BSV’s founder Craig Wright had access to Satoshi Nakamoto’s Bitcoin private keys. Following BSV are Bitcoin Cash (BCH) and ETH, which performed relatively well, closing Q1 2020 with 7.1% and 3.1% gains respectively.

Overall, the top 5 largest cryptocurrencies by market capitalization recorded a 11.9% gain in Q1 2020, the report says.

Demand for stablecoins on the rise

One major trend of Q1 2020 that’s highlighted in the report, is the rising demand for stablecoins, which skyrocketed in Q1 2020 as investors sought refuge from the market decline and opted to weather out the storm, the CoinGecko report says.

USD stablecoins supply increased by 32.1% from US$5.7 billion in January to US$7.5 billion in April amid the COVID-19 outbreak and the economic crisis that ensued. The surge was mainly driven by Tether (USDT), whose supply grew by 1.6 billion.

In Q1 2020, USDT continued to dominate the stablecoin market, closing the quarter at a 84.4% market share, followed by Coinbase’s USD Coin (USDC) at 9.21%.

Gold-backed tokens also witnessed traction in Q1 2020, with trading volume rising 275% during the quarter. With trading volumes surging, the price of gold-backed tokens converged closer to spot gold prices instead of lagging behind, the report notes.

COVID-19 health crisis impacting all markets

But it’s not just the crypto market that’s felt the ramifications of the COVID-19 pandemic. According to the CoinGecko report, traditional markets, including crude oil and the US stock market, too, began significantly going down in mid-February. Crude oil closed Q1 2020 at a nearly 67% loss, while S&P 500 fell 20%.

The only gainers for Q1 2020 were gold, which jumped 4.5%, and ETH, the report says.

The COVID-19 pandemic outbreak has caused an unprecedented human and health crisis that has already greatly impacted the financial system.

According to the International Monetary Fund (IMF), volatility has spiked, in some cases, to levels last seen during the global 2007-2008 financial crisis. With the spike in volatility, market liquidity has deteriorated significantly, contributing to abrupt asset price moves.

A further intensification of the crisis could affect global financial stability, a new report by the IFM reveals.

Crypto Valley startups impacted

In Switzerland, the COVID-19 health crisis has already had a significant impact on the Crypto Valley’s blockchain startups. According to a survey of more than 200 startups conducted in April by industry trade group the Swiss Blockchain Federation, nearly 80% believe will most likely go bankrupt within the next six months. A similarly high percentage (88.2%) will not be able to weather the COVID-19 crisis without government aid, and more than half (56.9%) had already dismissed employees.