Oil is now more volatile than bitcoin

Indeed, bitcoin has failed to play that role to a satisfactory degree during the latest market selloff. BTC was down nearly 5% on Monday's stock market rout on a day the S&P 500 fell 3.5%, the biggest one-day loss by the broad-market index since August 2019. That drop was not an aberration for BTC, either, which has suffered intraday declines of more than 3% seven times so far in the first two months of the year alone.

For perspective, gold bullion was down 1.5% to about $1,650/oz though still 5.1% up over the past 30 days.

Coronavirus Mayhem

And you might have guessed right by now: the coronavirus mayhem is largely to blame for crude oil's sharp spike in volatility.

The viral outbreak has thrown a monkey wrench into financial markets across the globe, with the crude oil market frequently finding itself whipsawed by the turn of events.

The January rally that saw oil WTI prices shoot up nearly 10% in a matter of days was triggered after Washington launched a retaliatory attack on an Iranian military base in Iraq, killing a top military commander and injecting considerable geopolitical uncertainty into the markets. Unfortunately, the rally was only to be short-lived, cut off by the first news of the coronavirus outbreak in China.

The oil market is officially now in bear territory after posting the worst day in more than a month on Monday on heightened coronavirus fears.

US WTI crude dipped more than 5% at the session low to settle at $50.45 with investors worried that a subsequent slowdown in the global economy could further dent the already weakened demand for crude.

Prices, however, managed to slightly recover from the lows to settle at $51.43 per barrel--still bad enough for its worst day since Jan. 8--after Saudi Aramco CEO Amin Nasser reportedly said that the coronavirus impact will be "short term". Nasser said that Aramco has not evacuated its staff from China.

Right now, there's plenty of uncertainty in the oil markets with very little clarity regarding if and when the outbreak will be brought under full control.

While the Aramco chiefs expect the situation to have normalized during the second part of the year, others contend that the situation remains tenuous and the outbreak could rebound when Chinese residents return to work and school.

Monday's heavy selloff suggests that the bears are the ones holding sway right now, while trading in oil has suddenly become a (fabulous, for some) game of volatility that makes it as exciting as crypto.