The term FUD (Fear, Uncertainty and Despair) commonly used in the cryptocurrency market, seems to be the order of the day, even in traditional financial markets as Black Friday, truly lived up to its name.

On the day, financial markets all over the world sold off, as a result of panic selling by investors, caused by fear of a new COVID-19 strain, which has been found to be vaccine-resistant.

Stock markets that have hitherto been doing performing robustly were shaken by the uncertainty of the new covid strain, as market watchers insist volatility might continue as more countries risk the spread of the variant.

Global markets rattled by new covid variant

Wall Street was having a bad day as the Dow Jones Industrial Average ended the trading session down by 2.53% with its basis points at 34,899.34. This decline represents the indexes largest percentage drop in more than a year. The S&P 500 was not left out as the index stood at 4,594.62 basis points, down by 2.27%, its worst one-day drop since February 2021. The Nasdaq Composite also dropped by 2.23%, to 15,491.7 basis points, its biggest one-day drop in two months.

European stocks saw their biggest sell-off in 17 months as the FTSE 100 lost 3.64%, with its basis point currently trading 7,044.03 and the S&P Europe 350 losing 3.75%, currently trading 1,847.88 basis points. The Asian markets too was not left out with the NIKKEI 225 losing 2.53%, currently trading 28,751.62.

The cryptocurrency market, known for its rapid volatility, also suffered a loss. The market capitalization lost 8.78%, from trading 2.62 trillion in the early hours of the day to as low as 2.39 trillion. Flagship cryptocurrency asset Bitcoin suffered a $6,000 loss on the day, after trading a daily high of $59,450, to trade as low as $53,569.76, representing a 9.89% decline. Altcoins were not left out as majority of the top 50 altcoins posted double-figure losses.

The oil market took a big hit as COVID-19 concerns coupled with a coordinated reserve release orchestrated by the U.S., caused a massive sell-off in the market. The global benchmark, the Brent crude oil lost 11.32%, to currently trade $72.91 per barrel, falling well below the $80 benchmark. The U.S. benchmark, the West Texas Intermediate (WTI), lost 13.04%, currently trading at $68.17 per barrel, falling below the $70 trading zone. This is their largest one-day drop since April 2020.

A new variant, a new name… This time it’s called ‘Omicron’

The virus was first referred to by the code name B.1.1.529. However, on Friday, the World Health Organization (WHO) assigned a new name for the virus. The WHO assigns new variants a Greek letter, so as to provide a non-stigmatizing label that does not associate new variants with the location where they were first detected. The WHO has now decided to name this new variant Omicron.

According to The Guardian, Omicron was identified on the 23rd of November and highlighted as a concern due to its high number of mutations, which could lead it to evade immunity. It was linked to a surge in case numbers in the Gauteng province of South Africa, an urban area containing Pretoria and Johannesburg, in the past two weeks.

The report also explains why this new variant has government scared. It explains that Omicron has more than 30 mutations on its spike protein (the key used by the virus to unlock our body’s cells), which is more than double the number carried by Delta. Such a dramatic change has raised concerns that the antibodies from previous infections or vaccination may no longer be well-matched. It reads that purely based on knowing the list of mutations, scientists anticipate that the virus will be more likely to infect or reinfect people who have immunity to earlier variants.

Due to the fact that Omicron is vaccine-resistant, it got the attention of the international community, with the chief medical adviser to the UK Health and Security Agency describing the variant as the “most worrying we’ve seen”.

Omicron has forced some countries all over the world to rapidly put in place travel restrictions on countries known to have a case of the new variant, which includes South Africa, Botswana, Hong Kong, Belgium and Israel so far. The United Kingdom, as of the time of this writing has placed travel restrictions on 10 African countries while the United States has placed restrictions on 7 countries so far.

What they are saying

Keith Lerner, co-chief investment officer at Truist Advisory Services stated, “A flight to safety is underway with the 10-year U.S. Treasury yield down. The proximate cause of the sell-off is yesterday’s announcement of a new COVID-19 variant in South Africa, which investors fear could weigh on economic growth.”

Greg Bassuk, chief executive officer of AXS Investments in Port Chester, New York stated, “Bottom line is, this is showing that COVID is still the investor narrative, a lot of today’s movement is driven by the South African variant. We have been talking about four or five factors that have been driving the last couple of months’ activity – inflation fears, some economic data, Fed policy – but what we have seen over the last year is that big developments with respect to COVID really have ended up eclipsing some of those other factors by a substantial degree and that is what is driving today’s market activity.”

CNBC’s Jim Cramer stated, “When I read that there’s one [case] in Belgium and one in Botswana, we’re going to wake up next week and find one in this country. And I’m not going to recommend anyone buy anything today until we’re sure that isn’t going to happen, and I can’t be sure that it won’t.”

Bespoke Investment Group’s Paul Hickey stated, “It’s important to stress that very little is known at this point about this latest strain, including whether it can evade vaccines or how severe it is relative to other mutations. Therefore, it’s hard to make any informed investment decisions at this point.”

Ajene Oden of BNY Mellon Investor Solutions stated, “Friday is the day after Thanksgiving — probably not as many traders on the desks, with an early close today. So potentially lower liquidity is causing some of the pullback. But the reaction we’re seeing is a buying opportunity for investors. We have to think long term.”


Although it is difficult to say whether or not the sell-off will continue because there is little information about how deadly this new strain is, investors must prepare for a very volatile week ahead as the headlines are set to control trader emotions and ultimately, the market.