The discovery of the new Omicron Covid variant last week sent global markets reeling — and crypto was no different — with most major tokens down roughly 10% over the weekend. Trading around US$60,000 late last week, Bitcoin dropped almost 10% over the course of the day in response to the news, hitting just above US$53,500 by Friday day night, according to CoinMarketCap. World number two blockchain Ethereum fared even worse, dropping 13% on Friday.

“This news has affected all markets,” Jonathon Miller, Australian managing director of digital asset exchange Kraken, told Forkast.News. “Crypto markets have been relatively uncorrelated when it comes to stock markets. However, investor sentiment carries over different asset classes, and when you have news where we’ve got worries again of lockdowns, Europe becoming cautious and having a spike [in Covid cases] as well, all these things have an impact in terms of investor sentiment [and] confidence in general.”

While the price volatility was far greater than what many may have foreseen, as Forkast.News reported late last week, some industry watchers were expecting some market volatility late last week as almost US$3 billion worth of Bitcoin price options were set to expire. One crypto exchange, Deribit, was responsible for settling US$2.6 billion of that alone.

Fortunately, the impact was relatively short-lived, and many major tokens had already retraced most of their positions from Friday coming in Asia business hours. Bitcoin had already recovered over 8% to briefly crack the US$58,000 mark this morning, while Ethereum rebounded almost 9% after a low of just above the US$4,000 mark early this morning. They were trading at US$57,413 and US$4,328 at press time, respectively, according to CoinMarketCap.

While the shock to the market was quite severe, its equally rapid recovery would not come as a surprise to one industry watcher.

Inflation is skyrocketing, and people are searching for more alternatives for their money [than] the bank,” Ruud Feltkamp, CEO of cloud-based automated crypto trading bot Cryptohopper, told Forkast.News in an emailed statement over the weekend. “I don’t think it’ll take long until investors see this as a ‘cheap’ buying moment. We are still in the midst of the bull cycle, and rising inflation will lead to more money being allocated to stocks and crypto.”

This is precisely what one of Bitcoin’s most famous advocates did. El Salvadoran President Nayib Bukele made the announcement on Twitter that “El Salvador just bought the dip. 100 extra coins acquired with a discount.” After El Salvador became the first country in the world to adopt Bitcoin as legal tender, Bukele has often taken to Twitter to announce when the country adds to its positions — including when Bitcoin’s price plunged 15% right after the adoption in a move that could have added fuel for opponents of the adoption. According to the data aggregation site BuyBitcoinWorldWide, El Salvador owns 1,120 BTC, though it is unclear if this number includes this most recent update.

While Bitcoin set a new all-time high of US$68,789 earlier in the month, its market dominance has continued to fall from a two-month high in October, while Ethereum has only continued to grow. This is a reflection of the growing use case for alternative coins and of a diversifying market, Miller said, where projects such as decentralized finance, non-fungible tokens and stablecoins have all started to gain real traction.

“Up until recently Bitcoin has had a huge amount of dominance because it’s been the core asset, the most developed asset, the most used asset,” Miller said. “But that story is changing. And especially the past several years — 2017 was a turning point, absolutely — but this past year or two have been essentially a watershed year for alternate asset types, especially Ethereum, where you’ve seen a huge amount of innovation, uptake, adoption and use cases coming to market that was perhaps in 2017, speculative, but today [are] very real.”

For instance, one of the few coins to show steady growth over the past few days is LUNA, the native token of the Terra blockchain, which actually gained more than 12% over that time to breach US$50, nearing its all-time high it set earlier in the month of US$54.77. Using fiat-pegged stablecoins, Terra enables price-stable payment systems, combining price stability and wide use of fiat currencies with the security and censorship resistance of Bitcoin. Terra’s token LUNA is currently sitting at number 13 position by market cap, according to data from CoinMarketCap.

As shown by the explosion in popularity of Dogecoin-inspired tokens, the crypto world loves a meme — and even memes about the coronavirus are no different. A relatively unknown token sharing the same name as the newly discovered strain of the virus, Omicron, has seen its price skyrocket as a result, jumping almost 800%  in less than a day to set its all-time high of US$692, according to CoinMarketCap. But this is not a case of a token being created to cash in on the hype — Omicron was only created in early November as a fork of the OlymusDAO DeFi platform and is just a case of incredible timing for the newly formed token that it happens to share a name with the new strain. The new B.1.1.529 strain was named after the 15th letter of the Greek alphabet, as the well-known Delta strain was named after the fourth.

There are, of course, tokens that do reference the pandemic. “Covid Token” (COVIDTOKEN) is ranked 3,049th on CoinGecko (it is not tracked by CoinMarketCap) and has surged 57% in the past 24 hours to be trading at US$0.00389981 at press time — still almost 90% below its all-time high — which means investors who bought in at its Aug. 25 peak would need to see current prices increase twentyfold more, for their bet to break even.

“Meme coins will always be part of the crypto world, just like memes are part of the internet,” Miller said. “But we’re talking about the internet of money here and there are lots of forms, and where people like to play around on the net they’re doing so now with crypto. It just shows you how accessible the technology can be that you can develop these kinds of protocols. Whether they’re something that will be around for the long term, I’d be skeptical, but this is part and parcel of the space.”