Several weeks have passed since The Jaws Industrial Average after running a rather daunting ball. Cryptocurrency is also making a correction. Can there be a relationship between the two investment worlds?
We need to be cautious when using the terms such as the "bull and bear market" when crossing each investment location. The main reason for this is that cryptocurrency gained more than 10 decades during Law & # 39; s amazing 2017 "Bull Run". If you put $ 1000 in Bitcoin at the beginning of 2017, you can earn over $ 10,000 towards the end of the year. Ditional stock investing has never been experienced before. The Dow increased by about 23% in 2017.
I'm really careful when reviewing data and charts because I understand that you can tell what the number is. In 2017, as Crypto saw huge gains, 2018 saw an immediate correction. The point I'm trying to make is that we should try to be objective in our comparisons.
Those who are new to the cryptocurrency camp are shocked by the recent crash. They all heard how all these early adopters were getting rich and buying lambos. To the more experienced traders, this market correction is quite obvious due to sky-high prices over the past two months. Many digital currencies have recently made many people millionaires overnight. It was obvious that sooner or later they would want to take some of that profit off the table.
I think one of the other things we really should consider is the recent addition to Law Bitcoin Futures Trading. I personally believe that under the leadership of the old guard there is a large force to work with who want to see crypto fail. I see the tension around futures trading and the crypto ETFS as a rich move towards the crypto mainstream and a "real" investment.
After all that, I started thinking, "What if there was a connection here?"
What if the bad news on Wall Street affects crypto exchanges like Coinbase and Binance? Can it cause them both to collapse on the same day? Or if the opposite is true and people are looking for another place to park their money then crypto has grown?
I wanted to wait until I found a relatively neutral playing field, trying not to sketch the numbers and stay as objective as possible. This week is almost as good as the time period presented when both markets see the correction.
For those not familiar with cryptocurrency trading unlike the stock market, exchanges never close. I have been in the stock business for over 20 years and you know the feeling that you are sitting on a lazy Sunday afternoon at noon,
"I really wish I could trade with a location or two right now because I know that will change significantly when markets open prices."
Availability like Walmart can also lend knee-jerk sensitive reactions that can snowball on both sides. With the traditional traditional stock market, people have the opportunity to push the break button and sleep over their decisions overnight.
To get the equivalent of a one-week cycle, I took the last 7 days of crypto trading data and the past 5 for DJIA.
Here are the sides (3-3-18 to 3-10-18) compared to last week. The Dow (which has declined due to 25 out of 5 companies) decreased by 5 points, representing a decrease of 8.25%.
Finding an apple is a bit different for cryptocurrency than Apple is because Dow is technically non-existent. This is changing though many groups are making their own version of it. The closest comparison at this point is the use of the top 30 cryptocurrencies in terms of total market cap size.
According to Coinmarketcap.com, 20 of the top 30 currencies were down below in the previous 7 days? If you look at the entire crypto market, the size has dropped from $ 445 billion to $ 422 billion. Bitcoin, seen as the gold standard equivalent, fell 6.7% in the same time frame. Usually Bitcoin goes, so go the Bitcoin.
Coincidence or not? How have we seen almost similar results? Was there a similar reason to play?
While the price reductions seem similar, I find it interesting that the reasons are quite different. I told you that numbers can be deceptive so we really have to pull the layers back.
Here are the headlines that affect Dao:
USA Today reported, "Strong wage information raised fears of a wage hike, which intensified concerns that the Federal Reserve may need to signal a three-fold higher rate than originally intended."
Since crypto has been decentralized it cannot be driven by interest rates. This could mean that in the long run, higher rates allow investors to put their money elsewhere for higher returns, which is where Crypto can play very well.
If this is not an interest rate, what is the reason for the crypto correction?
This is mainly due to controversial news from most countries, how their position will definitely affect the market. There is global discomfort over whether countries will allow them as legal investments.
This past week saw some favorable news from congressional testimonials from Jay Clayton (SEC chairman) and Christopher Giancarlo (CFTC chairman). The idea was that they wanted to eliminate bad players and make sure they followed ATML laws, they also wanted to allow innovation.
It certainly appears that the connection between two worlds to the same outcome is uncertainty.
We all know that markets do not like uncertainty. However the uncertainty is fleeting. One day the causes of anxiety can sometimes be resolved overnight. There are times when the news is so shocking that it cripples the market for months or even years.
The key is keeping an eye on all this information and deciding what is real and what is not.
Since I'm long on both stocks and cryptocurrencies, I believe that keeping an eye on both can be quite rewarding. Profit opportunities exist almost every day. This is especially true in the case of crypto because I often bought a currency that was reduced by only 30% over the previous day and then dropped another 30%, but everything came back within a week.
I recommend staying as varied as necessary (this varies with each person's condition). There is a day when one is at the top and the other at the bottom. To boost morale, the option to log in to the account seemed like a better day. If you have an account in both worlds, you can probably relate to it.
One thing is for sure, crypto is here to stay and will certainly make investing more attractive.