After a beautiful bullfight, the Dow Jones Industrial Average experienced two difficult weeks. The cryptocurrency has also been corrected. Can there be a correlation between the two investment worlds?
When crossing each investment space, we must be careful to use vague terminology such as “bull and bear”. The main reason is that the cryptocurrency during its incredible “corrida” period in 2017 has recorded a growth of more than 10 times. If you invest $1,000 in bitcoin in early 2017, you will earn more than $10,000 by the end of the year. Traditional equity investments have never experienced this. The Dow Jones index rose about 23% in 2017.
I was very careful when looking at data and charts because I realized that you can let the numbers say what you want them to say. Just as encryption generated huge profits in 2017, similar rapid adjustments occurred in 2018. What I want to say is that we should strive to be objective in comparison. You can get more information on Bitcoin Cash ABC site.
Many people who are unfamiliar with cryptocurrencies are shocked by recent accidents. All they heard was how all the first users got rich and bought Lambos. For more experienced traders, this market adjustment is very obvious due to the price increase in the past two months. Many digital works have recently turned many millionaires into one night. Obviously, they will sooner or later want to get some advantages from the desktop.
In my opinion, another factor that really needs to be considered is the recent increase in bitcoin futures trading. Personally, I think the important force is here, under the guidance of the old guards, they want to see the failure of cryptography. I also believe that the excitement of futures trading and encrypted ETFs is a positive step in turning them into traditional encryption markets and “real” investments.
After saying so much, I began to think, “If there is a way, is there a connection here?”
What happens if bad news on Wall Street affects encrypted transactions like Coinbase and Binance? Can I let them fall on the same day? Or what happens if the opposite is true and when people are looking for another place to park their money, what will result in an increase in cryptography?
In order not to distort the numbers and remain as objective as possible, I want to wait until the venue is relatively neutral. This week is as good as any other week because it represents a period of correction for both markets.
For those who are not familiar with the cryptocurrency business, unlike the stock market, the transaction will never end. I have been trading stocks for more than 20 years and I know very well that you are thinking about a lazy Sunday afternoon:
“I really hope that I can trade one or two positions at this point because I know that when the market is open, the price will change significantly.”
This availability, similar to Wal-Mart, can also lead to an instinctive emotional response that can turn into snowballs in all directions. In the traditional stock market, people have the opportunity to press the pause button and sleep at night. You can get more information on Bitcoin Cash ABC site.
In order to get the equivalent of a week, I spent the last 7 days of encrypted exchange data and the last 5 days of DJIA. The following is a side-by-side comparison of the past week (3-3-18 to 3-10-18). The Dow Jones index (which lost 20 of the 30 companies) fell 1330 points, down 5.21%. For cryptocurrencies, comparing Apple to Apple is a bit different, because technically, there is no Dow Jones index. This situation is changing as many groups create their own versions. The closest comparison is currently using the top 30 cryptocurrencies by total market capitalization.
According to coinmarketcap.com, 20 of the top 30 currencies have fallen in the past seven days. Sounds familiar? If you look at the entire cryptography market, its size has increased from $445 billion to $422 billion. Bitcoin is considered the equivalent gold standard, down 6.7% over the same period. Usually, when the bitcoin passes, the altcoin will do the same.
Coincidence or causality? Why do we see almost similar results? Is there a similar reason?
Although the price declines seem similar, I find it interesting because the reasons are very different. I have already told you that numbers can be misleading. So we have to delete the layer.
Here are the main news about Dow:
According to today’s US “good wage data are raised against future wage increases, which raise concerns, the Fed may have to raise more frequent times this year than the initial three fears.”
Since encryption is decentralized, it cannot be manipulated through interest rates. This may mean that in the long run, higher interest rates may cause investors to invest money elsewhere to seek higher returns. This is where encryption can go.
If it is not the interest rate, what is causing the encryption correction?
This is mainly due to the contradictory information of countries regarding their status in the market. People around the world don’t know if countries will allow them to be legitimate investments.
Last week, we heard good news from Congressional testimony Jay Clayton (chairman of the SEC) and Christopher Giancarlo (president of TCRC). The feeling is that although they want to eliminate bad guys and ensure that anti-money laundering laws are respected, they also want to allow innovation.
It seems that the link between similar results between the two worlds is uncertain.
We all know that the market does not like uncertainty. But the uncertainty is short-lived. The cause of a day’s anxiety can sometimes be resolved overnight. Sometimes the news is so amazing that it puts the market in a state of embarrassment for months or even years.
The key is to check all of this information and decipher the real and unreal.
Because I spend a lot of time on stocks and cryptocurrencies, I think it’s very beneficial to pay close attention to both. The possibility of profit exists almost every day. This is especially true for cryptography, because I often buy only 30% of the last day, and an extra piece of 30%, but it has recovered all of it, more in a week.
I recommend keeping it as diverse as possible (depending on everyone’s situation). One day, one is in place and the other is in place. In order to improve morale, it is best to be able to log in to the account with the best day. If you have an account in both areas, you might be able to understand this.
One thing is for sure, encryption is here, and making investments more interesting.