Bitcoin rallied back again to $4k from recent highs and crypto followed as share stores across the globe go on to fall in to a condition of reduction.
While the 2 truth aren't necessarily related (consider btc has been in a bear store longer, was more oversold, and charts showed some positive indicators, while shares seem to be reacting to a string of FUD and bearish charts), it is none-the-less notable.
In theory and on paper crypto is arguably supposed to act as a hedge against bubbles in classical stores affected by speculators the monetary and fiscal policy of bankers and states.
In words, Bitcoin is meant to be the peoples' currency of the net, deflationary and dominated with code, instead of a inflatable widget of both bureaucrats and bankers that is able to print money at will.
i.e. which are partially ideal promised a long time before excited speculators began claiming eachother lambos… it isn't the whole story.
Anyway, point being, at a time when stores are panicking over Brexit, US rate hikes, tensions, and trade wars, and in a time when Bank shares, industrials, big tech, and major indexes are looking like sad altcoins, it is encouraging to see crypto rally in response.
In the last cycle, in 2016 – 2017, both shares and crypto were in full on bull mode, it was Trump pumps and lambo dreams for days.
In the second half of 2018 both shares and cryptos have been mostly bearish, but in general the share store looked more like the playground of the wise while crypto stores looked suitable only for speculators set on shorting.
However, in this moment in time, things are a little less grim for crypto and a lot of more grim for shares.
At the moment crypto is acting as a hedge against a share store looking like it might be, all fundamentals and merits aside, suited only for speculators shorting.
This is, from that one perspective, a nice sign for crypto.
With that said, there are some important side notes:
- Stock stores (i.e. equities stores, and the cost of goods like oil, corn, and gold, etc) aren't exactly the equal as Forex stores and bond stores. The fact could be that the US dollar is so strong, interest rates are moving up, and ergo bonds aren't in bad shape. Meanwhile, US job growth and economic growth is there. The US is hardly collapsing. Although I hope we never obtain to test this out, the ultimate power move of crypto would be to act not as a hedge against Netflix and oil, but as a hedge against a tanking USD or Euro.
- Just as often if not more often in the past, crypto and shares have correlated. Crypto seems to take on different moods, it certainly hasn't listened the same as a monster, it likely won't always act like a hedge moving forward.
- When the world's share stores collapse it ruins many of the earth's 7 billion plus lives (even more would be ruined if dollars collapsed… and we can see this in states where dollars do collapse). It is not funny or cute in my opinion to watch declines in share stores. Wild speculation in crypto that results in a bubble pop makes some of us nerds, fools, and gamblers sad and makes good headlines, wild speculation in EVERYTHING stores is bound to leave a wake of destruction.
- Although crypto wasn't assembled just being a hedge each state (it had been a tech at the works any way ) Satoshi failed align that the launching of Bitcoin with the 2007 — 2010 economic meltdown and denote such from the notes of this Bitcoin Genesis block. This things as it speaks to the joyful actuality the crypto is presently behaving as a scam, and speaks to the seriousness and grimness of monetary meltdown and also the hands speculators and conditions.
All nevertheless… In my own opinion that the odds that the share stores moving in to great melancholy manner whilst crypto extends right to the moon are most likely close zero.
The moral of this story: In this period in time it's intriguing to find the significance of shares and crypto… however in both stores a solid method lacking emotion trumps over-reacting to FUD and FOMO. Markets scarcely proceed in straight lines and moods shift.
"Crypto Rallies as Stocks Fall" comprises advice concerning the subsequent Cryptocurrencies: Bitcoin (BTC)