Trump announces travel ban between Europe and the U.S., triggering a sharp drop in both the stock market and Bitcoin.

President Donald Trump, in a departure from his previous stance on the pandemic, announced a travel ban between Europe and the United States this morning. The news has caused panic in the financial markets, with Bitcoin also taking a hit, plummeting at the same time as the U.S. stock market, rendering its safe-haven status ineffective.

Announcement of Europe-America Travel Ban

U.S. President Donald Trump announced around 9 a.m. Taiwan time that within the next 30 days, there will be strict restrictions on travel from Europe to the United States in response to the Wuhan coronavirus, marking the strictest measure taken by the U.S. government so far. In addition to announcing this news, Trump also criticized the EU for not restricting Chinese tourists during the early stages of the outbreak and praised his own measures for limiting the increase in U.S. cases. Trump stated:

"The European Union failed to take the same precautions and restrict travel from China and other affected areas. As a result, the virus has been spread to the United States by travelers from Europe."

Trump mentioned that the ban does not apply to the United Kingdom and will take effect at midnight on Friday. In a brief announcement lasting less than ten minutes, Trump proposed a series of fiscal measures to address the economic impact caused by what he referred to as the "foreign virus," stating that he will mobilize the entire federal government to tackle the challenges posed by the coronavirus on Twitter.

https://twitter.com/realDonaldTrump/status/1237820230296010752

Markets in Panic

Furthermore, during the announcement, Trump overestimated the scope of the ban, leading to misconceptions that it would affect trade between Europe and America. Trump stated:

"The ban applies to more than just trade and goods, it applies to various other things as well."

This statement, along with the drastic change in attitude towards the outbreak, caused financial markets and the cryptocurrency market to plunge into panic. The Dow Jones Industrial Average fell 885 points, approximately 3.75%, after Trump's announcement. The S&P 500 dropped by 3.6%, and the Nasdaq Composite Index also fell by 4.1%. Reports indicate that both the S&P 500 and the Dow Jones fell into bear market territory, with only the Dow Jones closing in bear market territory.

Although a White House official later clarified that the ban only applies to individuals and not goods, the securities market plummeted. Despite Trump's tweet further clarifying that trade will not be affected by the 30-day travel restriction from Europe, it was not enough to reverse the collapsing stock prices.

Bitcoin Losing its Safe Haven Status

It is worth noting that Bitcoin also experienced a simultaneous drop with the stock market this morning, indicating that its price performance is no longer seen as a safe haven asset as it has been in the past.

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