The S&P 500, an index of large U.S. stocks, fell by 11 percent last week to register its biggest weekly drop since the financial crisis of 2008. 

Equity markets cratered as the coronavirus spread outside China at a faster rate, triggering fears of global recession. 

Interestingly, bitcoin, the top cryptocurrency by market value, also fell by 13 percent last week, confounding a few analysts, who were expecting the cryptocurrency to benefit from risk aversion. Bitcoin had rallied by 30 percent in January amid the U.S. Iran tensions and the beginnings of the coronavirus outbreak in China. 

Billionaire investor and Galaxy Digital founder Micheal Novogratz thinks bitcoin served as a source of liquidity to fund margin calls triggered by the stock market crash.

A margin call occurs when the value of the investor’s leverage account drops below the minimum margin requirement. The investor is then required to bring in additional capital or securities to build back the account up to the minimum margin requirement. 

Gold also fell by 4 percent – also the biggest weekly loss since November – reportedly due to margin calls. 

While bitcoin underperformed last week, it is still posting bigger gains on a year-to-date basis than the S&P 500 and gold. The cryptocurrency is still up 20 percent on a YTD basis, while the S&P 500 is down 9 percent and gold is reporting a 4 percent rise.