Yesterday, Gold hit a 9-week high, at the same time when the stock markets crashed all over the world. But contrary to the expectations of many, that stock market uncertainty would drive money into crypto, the crypto market has experienced a huge sell-off as well. In the last 48 hours, Bitcoin (BTC) has hit a low of $6000, while most altcoins are now deep in the red. That’s an indicator that crypto and the stock markets are positively correlated. It goes to show that in case of a recession, precious metals would still win.
As such, the best bet for crypto investors is to hope that the stock market’s rebound. A stock markets collapse could spell doom for crypto, a market that has been in bear territory for the last 9 months.
Lay of hope
Luckily, there is a possibility that the markets could rebound soon. That’s because part of the reason why the markets are in turmoil is due to trade war between the U.S and China. To resolve this, the Chinese and American leaders will meet in a summit scheduled for November. If they find a way to put an end to this trade war, then the markets could rebound.
The other factor causing market turmoil is the fast-rising interest rates in the U.S. On this front, President Trump has been quite critical of the moves by the FED. His concerns could see the FED slow down on the rate hikes, and ease off some of the pressure that higher interest rates will have on companies.
If these two issues are ironed out, the stock markets could rebound and could pull up the crypto market as well.
The correlation between crypto and the stock markets could change in the future as crypto becomes more entrenched in the market, and more people get to appreciate its power. However, as things stand, the best bet for crypto investors is to hope that the stock market’s rebound.