One of the supposed benefits of holding cryptocurrency that has been peddled is that it is a strong hedge against a down turn in traditional securities. Here we have a new, real data point to the contrary.
Bitcoin and cryptocurrency prices have fallen sharply over the last few days
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Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#12Wait...aren't crypto currencies supposed to be the favored monetary instrument during times of crises?
Not until they are widespread among general population and can be easily and anonymously transferred between people, like cash.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#13I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.
One possibility is that it's because the stock market seems like a good buy for speculators right now. The stock market does have an underlying value long-term, in that stocks are pieces of companies that produce products. The true value of that is always uncertain, but various measures indicate that it may be approaching reality (after a long, overheated bull market).
Crypto is more purely speculative, with no real underlying value aside from the hope that it will some day become the fiat currency of some nation. (Fiat currencies have a "value" in that they are the only thing a government will accept.)
So it's possible that people are seeing bargains in another market. They need to move through fiat currency in order to buy it, but they don't hold it long enough for inflationary measures by central banks to affect it.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#14Where is all this cash going? If stock is down, crypto is down. Where is all cash?
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#15Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#16One of the supposed benefits of holding cryptocurrency that has been peddled is that it is a strong hedge against a down turn in traditional securities. Here we have a new, real data point to the contrary.
I still think this is true in a "traditional" bear market where companies are doing poorly. I don't think is applies when the entire market is panic selling to acquire supplies.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#17I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.
> especially when "print more money" seems to be the fed's response to this
The simple answer is that the quoted text isn't even a concern in your average investors head. Also why gold isn't doing great, and why the US dollar is doing just fine.
People are escaping equities specifically, not the dollar.
edit: If i had to guess, people are probably looking to maximize cash on hand with the goal of "buying the dip" when it looks like the market is going to bottom out.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#18I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.
Just an hypothesis (which applies to the stock market as well): if you already thought things were overvalued, but were just waiting for the right moment to cash out, then whether this moment makes rational sense or not, you get out now because you were going to get out soon anyway.
Also, you may think everyone else is going to be "irrational" in this way, and wish to get out before they do. Sort of like buying toilet paper because you're worried about everybody else hoarding toilet paper.
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#19I have to say, the crypto market's strong ties to traditional finance in this crash surprise me. I understand selling off stock because of expected corporate losses, I don't understand mass conversions to FIAT especially when "print more money" seems to be the fed's response to this.
Say you have an extra tampon and want a banana. I want a tampon but don't have a banana. What would you rather accept from me in exchange for a tampon, $cash or some BTC in your online crypto wallet? What do you believe has better chance of being exchangeable for a banana, from someone else?
Re: Bitcoin and cryptocurrency prices have fallen sharply over the last few days
#20Bitcoin market is like the regular equities market...without the halting capabilities