Nov 18, · When the bubble burst spectacularly in , it was just about all the evidence many professional investors needed to shrug off cryptocurrencies as a market for gamblers, crooks and acolytes of Satoshi Nakamoto, bitcoin’s pseudonymous creator. Those players are still on the scene. Dec 17, · Bitcoin is in a 'massive bubble' and investors don't understand how its supply works, says economist David Rosenberg Known for identifying the housing market bubble in , David Rosenberg is the Author: Emily Graffeo. Bitcoin Is Correlated With the Stock Market, Analysts Conclude The narrative that Bitcoin is never correlated with the stock market has quickly unraveled over recent months. In March and April, during the first liquidation phase of the ongoing recession, BTC and the S&P
Bitcoin bubble stock marketBitcoin: How Cryptocurrency Could Cause a Stock Market Crash | Money
Internet stocks in the late s represented a substantial portion of what was then and is again the largest sector of the economy: tech.
By comparison, the sum total value of all Bitcoins and other cryptocurrencies circulating in the world now is smaller than the current market capitalization of just one company: Microsoft. Still, there are three plausible ways the bursting of the Bitcoin bubble could gore the aging bull market in stocks, which is about to turn 9 years old in March. In that sense, Bitcoin has a tangible connection to stocks.
In the late s, investors started noticing something: All a company would have to do was to put a dotcom at the end of its name or include a sentence in a press release about launching an e-commerce site, and the stock would jump. The imaging company Eastman Kodak recently hitched its struggling wagon to cryptocurrencies—initially by launching its own virtual currency, KodakCoin , which can be used by photographers to securely sell the rights to their photo and receive payments using blockchain technology.
Since the announcement, on Jan. Kodak then doubled down on crypto. According to news reports out of the CES consumer technology show, Kodak plans to partner with a company that will lease Kodak KashMiner computers to mine for Bitcoin. And Kodak is hardly alone. They are changing their entire business models. Late last year, the biotech equipment maker Bioptix changed its name to Riot Blockchain and its business plan to investing in cryptocurrencies and blockchain technology.
The same thing happened with Long Island Iced Tea, a little-known beverage maker that changed its name to Long Blockchain and its business model to investing in blockchain technology.
It all sounds promising. But as many market watchers point out , Pets. But when they are scared or shaken enough—for instance, by a financial collapse, like in the global financial panic in —they start looking down at their feet and notice how dangerous their strategy really is.
Advertiser Disclosure Close Advertiser Disclosure The purpose of this disclosure is to explain how we make money without charging you for our content. By Paul J. Lim January 18, Getty Images. Nick Chong Jun 18, One of the biggest Bitcoin narratives is that it is an asset that is largely uncorrelated with the rest of global markets. Yet with the recent downturn in global markets, the uncorrelated nature of Bitcoin has somewhat devolved.
The growing correlation between crypto and the rest of global markets may not bode well for Bitcoin as prominent investors expect a deeper retracement in the stock market. The narrative that Bitcoin is never correlated with the stock market has quickly unraveled over recent months. Chart from TradingView. When equities would rally, so would BTC — and vice-versa.
As the SPX rolls over and tests 2, expect all asset classes to puke again. The persistence of this correlation is not good for Bitcoin bulls, especially because fears of a further retracement in the stock market swells as the economy remains in a poor position. He told the same CNBC segment last week that he also sees a bubble-like market forming, drawing attention to the extremely high valuations of certain companies despite decreasing revenues. Should that bubble pop, Bitcoin is unlikely to benefit, as Hayes, the analysts at JPMorgan, and others have explained.
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