How Would a Stock Market Crash Affect Crypto Market? (2018)
With all this talk about the possibility of a crash in the stock market, I thought I'd provide an updated video sharing my thoughts about how this might affect the cryptocurrency market, if at all.
In short, I think it would be very bad. Cryptocurrencies are perceived as a high-risk asset, so would be sold in exchange for the much "safer" fiat currency, in spite of any and all long term fundamentals.
Let me know what you think.
DISCLAIMER: This is NOT financial advice. I am just offering my opinions. I am not responsible for any investment decisions that you choose to make.
▲▲▲▲▲ Looking to get started with cryptocurrencies? Check out my crash course here: https://louis-thomas.teachable.com/p/buying-bitcoin-crash-course
Check out this:
https://steemit.com/steem/@mysteemwallet/nbqhusno
How this could happen?
I am also intrigued by this question. I think no doubt there would be an initial sell down but I don't think there would be that much damage that the market wouldn't recover in a number of months. My belief is that cryptocurrency has always been extremely volatile and a crash in the stock market relative to 'crashes' we have seen in crypto on a percentage basis is quite small. If we have people that are still keen investors after seeing an 80% decline since the peak of the market I think we are in good shape.
In addition we are still primarily a retail investor market with very little institutional penetration in the market. In theory this would mean that the balancing act that institutions undertake among asset classes shouldn't have a huge effect on the cryptocurrency market.
I think a stock market crash would force investors in to the crypto market. Investors are going to invest.
I see where you're coming from...and I'm inclined to agree
Posted using Partiko Android
Our thoughts are quite similar really, a stock market crash will in no way favor Crypto...way too volatile
I think a crash would start out bad for crypto, but then there would be a reversal that would be totally uncorrelated to the stock market.
I think the word 'bad' is a bad word to use. If crypto loses 90% of its market cap I would be cheering even though I just "lost" a ton of money.
I want more coins at the moment. I'm not too worried about how much the coins are worth for at least another three years.
The Petro-Dollar (USD) is currently under attack. A stock market crash might be accompanied by an entire economic crash. It's totally possible that USD itself loses value.
China and Russia know that we are spread thin, and Venezuela just upped the ante by doing oil trades with the Euro instead of USD. We live in very uncertain times. Trump is trying to impose tariffs all over the place. Who knows what kind of geopolitical effect that's going to have. I'm guessing a backfire of epic proportions.
Stocks down crypto up.
Posted using Partiko Android
But what if the stock market are tokenized by then :P
So is then part of crypto? ;)
Absolutely agree with you given the risky assets category cryptocurrencies are! However, I think it will be a short term shock as I think that the governments and their Central Banks will look to add liquidity to the market which promote riskier positions. This will also lead to fiat currency weakness which could inflate prices. Given the scarcity and limited supply of some cryptocurrencies like bitcoin, we could then see them as a safety asset against the devaluation of currencies.
Agreed. Bitcoin is no safe haven. There was a study on that published recently.
Posted using Partiko Android
A lot of what you said makes sense after a stock market crash crypto currency’s probably would take a dip as the metals would but I’m sure they would bounce back even stronger and perhaps faster if more people understood what fiat currency’s really are , what worries me the most is to what lengths would the elite go to protect their fiat currency’s if we all started using crypto currency’s? Cheers mike