I was thinking that investors would think the cryptocurrency market as an alternative to traditional investment products.
Having said that, my point was that those two markets have a reverse impact.
If the stock market goes down, then investors would start searching for alternative (more profitable) investments and turn to Bitcoin and cryptocurrencies.
The last days stock market crash seems that lead the market cap of the crypto market down.
Does the Stock Market has impact over the Bitcoin price?
Well, you can look at it like this:
(1) IF the reason BTC prices are were they are at on speculation that the price will rise and it is because the stock market is high and the economy is good...
and using this extra discretionary spending in good times on Bitcoin...well, it could be that the market crash would affect Bitcoin in a negative way, price-wise.
In other words, you'd want to buy BTC, but with stock market down and economy going down, etc, you no longer have the discretionary extra income to do buy BTC and thus a slump in price/usage/etc.
{2) IF on the other hand Bitcoin is like virtual real estate, like only 21 million coin and 3 million BTC left, and holding like land. Or how I view BTC as a limited asset.
(less and less available on adoption worldwide when the recession hits) and in a stock market downturn acts like 'virtual gold' kinda/sorta like a 'store of value' in bad economic times and a
stock market downturn..then likely it would act as a store of value like gold and go sideways, maybe up a little in value, but at worse would not tank the 20% like the stock market to be
called a recession or even further.
So make your bet. I'm HODL'ing BTC now because with my state taxes and capital gain taxes if I sold BTC that is 25% gone poof....if I put these newly converted BTC to $$$ into the stock market
and we have a recession (20% correction on the stock market is a recession) now I'm 45% down and with the antics of the Trump Administration I am myself assuming at least for a bit a 40% downturn
which would make my play of BTC to cash a 65% loss. Also, the rule of thumb used to be 3-7 years on a recession for the stock market to come back. A lot of those in the know are guessing 7-12 years
on the next recession to come back from it. So IMHO, now is NOT the time to diversify some BTC into the stock market, especially at what is now the ATH in the USA. Wait, till a recession and stuff
goes off the rails and then get stocks if you wish or real estate or whatever. Myself, I would be very despondent, if I converted BTC to USD into stocks now and then we had a recession at 40% and
I'd be looking at a 65% loss...just to watch BTC and gold go sideways and/or up.
Thus my bet is to HODL the hoard and hang in there with traditional stocks as well. Have no debt for the next few years if possible and live within your means. I've gone thru like 5 recessions, they
suck and usually you blame yourself for job loss or whatever, when they happen, even though most of this stuff on 20/20 hindsight will be out of your control. So pay the J.C. Penny card off. Buy
some new tires. Do SOMETHING! Before the recession hits. If I am dead wrong, well, you have your finances in order...but if I'm right, you won't beat yourself up about such stuff in that at least
you did something pro-actively.
end of my rant (my coping mechanisms above anyway)
later
Brad