After a pretty good run of bulls in Dow Jones Industrial Average was about a couple of weeks. Kryptovalyuta also experiencing a correction. Could there be a connection between the two worlds of investment?
We must be careful when using vague terms such as "bull markets and bear" the transition to each investment area. The main reason to & # 39 is that cryptocurrency during his surprising 2017 "bull-running" saw profit slightly more than 10 times. If you invested $ 1,000 in bitcoin at the beginning of 2017, you would earn a little more than $ 10 000 by the end of the year. Traditional investments in equities have never felt like this. In 2017, Dow has increased by approximately 23%.
I'm really careful when viewing data and charts, because I understand that you can make the numbers say what you want them to say. Just as cryptocurrency saw huge gains in 2017, 2018 saw the same rapid correction. The point that I'm trying to do – this is what we should strive to be on the & # 39 objective in our comparisons.
Many of the new camp cryptocurrency shocked by the recent failure. All they have heard – this is how all of these early adopters got rich and bought lambs. For more experienced traders such a market correction was quite obvious due to the rapid rise in prices over the past two months. Many digital currency in recent years have made many people millionaires overnight. It was obvious that sooner or later they will want to take part of the profits off the table.
Another factor that I think we really need to take into account – it is a recent addition bitcoin f & # 39; yuchersnay trade. I personally believe that it employs the main forces headed by the old guard, who want to see the crypt will not work. I also see p & # 39; yuchersnyya bids and excitement around the crypto exchange-traded funds as positive steps towards the creation of a crypto-mainstream and feel "real" investments.
Having said all this, I began to think: "What if there's a connection?"
What if the bad news on Wall Street affected Exchange crypts, such as Coinbase and Binance? Whether they may fall in the same day? But what if the opposite is true, and this has led to increased crypt, when people were looking for another place to park their money?
In the spirit of not trying perakosnuts numbers and remain as much as possible about the & # 39 objective, I wanted to wait until we see a relatively neutral field. This week, as well as any that represents a period of time when both markets saw corrections.
For those who are not familiar with cryptocurrency trade, unlike the stock market, stock exchanges are never closed. I traded shares over 20 years and know only too well that feeling where you're sitting on a lazy Sunday afternoon, and you think,
"I would really like that I can take a position or two right now, because I know that when the markets are open, the price will change dramatically."
This availability, which reminds Walmart, also can cause emotional reactions that can rise to any side. With the traditional stock market people are able to press the pause button and go to sleep on their decisions during the night.
To get the equivalent of the weekly cycle, I took the last 7 days of trade data and the crypt for the last 5 DJIA.
That's comparable comparisons over the past week (03/03/18 to 10/03/18). Dow (because 20 of the 30 companies, consisting of loss of money) fell by 1,330 points, representing 5.21% decline.
Search for kryptovalyut apples to apples comparison is a little different, because the Dow is not technically exist. This is changing, though many groups create their version. The closest comparison to this time with a & # 39 is the use of the 30 best cryptocurrency with the overall size of the market cap perspective.
According coinmarketcap.com, the 20 best 30 coins has been reduced in the last 7 days. Sounds familiar? If you look at the entire market of the crypt, the size decreased from 445 billion to 422 billion. Bitcoin, which is regarded as the gold standard equivalent, in the same time decreased by 6.7%. Usually how the bitcoin, so things alkoiny.
Coincidence or causality? As we have seen almost similar results? There were similar reasons in the game?
Although the fall in prices seems like, I think it is interesting that the reasons for this are quite different. I told you before that the figures can be deceiving, so we really need to distract layers.
Here, the main news that affect the Dow:
According to USA Today, "high data on wages caused a fear of rapid wage inflation, reinforcing concern that the Federal Reserve this year, you may need to increase rates more than three times those reported previously."
Since the crypt decentralized, they can not control interest rates. This may mean that in the long run higher rates can cause investors to put their money elsewhere in search of higher returns. Exactly where crypto could very well enter the game.
If it were not "interest rates" that led to the correction of the crypt?
This is mainly due to the conflicting news from several countries as to what their position is, of course, adab & # 39; etsya market. People around the world worried about whether the country can even allow them as a legitimate investment.
Last week, with the & # 39; there were some favorable news in the readings of the Congress of Jay Clayton (SEC chairman) and Christopher Giancarlo (Chairman of CFTC). The point is that, although they would like to eliminate bad players and to ensure that laws relating to AML, they also want to ensure innovation.
Of course, it seems that the relationship of these results between the two worlds – this uncertainty.
We all know that markets do not like uncertainty. But uncertainty fleeting. Something that is of concern in one day, and sometimes can be solved overnight. There are also cases when the news is so staggering that paralyzes the market for several months and even years.
The key is screening all of this information and decipher what is real and what is not necessary.
Because I'm a long time as the shares, and on cryptocurrency, I believe that the care of the two can be very useful. The possibility exists to make a profit almost every day. Especially it concerns the crypt, because I often buy coins, which in the past day declined by just 30%, and then decreased by 30%, but recovered within a week everything and more.
I would recommend staying in a variety of different degrees (it depends on each individual situation). There are days when one is up and the other down. To improve morale would be good to enter the account that had the best day. If you have accounts in both the world, maybe you can address this.
One thing for sure, there will be a crypto and would certainly make the investment more interesting.