Will Bitcoin Be Correlated To The Stock Market Going Forward?
(Edited)
Bitcoin crashed along with everything else last March when the pandemic really started to hit. This was not surprising as investors/traders fled into cash.
Things have changed a great deal with Bitcoin since that time.
In this video I take on the question of whether Bitcoin will maintain a correlation to the stock market or will it operate on its own?
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BEER.Great perspective dear, the correlation is majorly related to the current mindset that is embraced by millions of people all around the world. It is more common to see people talking about the money-printing problem of the finance system. I think nothing can be shocking for me in this era in which people are fearful and indecisive.
We will see green/red days naturally. The crucial point is sticking to the broader perspective in which cryptocurrencies (existing ones or the upcomings) will eventually shape the future of finance with blockchain technology 😌
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The long game is always something I try to play. It is amazing how few do that.
We will see what next week holds, probably more fear for the people prone to that.
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https://twitter.com/shortsegments/status/1350389274139455488
Summary:
In this episode, Task analyzes the recent market trends where various asset classes, including stocks, gold, oil, and Bitcoin, experienced a significant downturn. Task discusses the correlation between Bitcoin and the traditional markets during market crashes, citing the events in March when Bitcoin dropped to $3,000 and the US dollar surged as a safe haven. He points out the substantial institutional interest in Bitcoin, notably by grayscale, and questions whether Bitcoin will continue to be correlated with traditional markets in future downturns. Task also explores the changing perception of Bitcoin among institutions and investors, highlighting its potential to act as a safe asset class in times of market turbulence. He mentions the mayor of Miami's interest in investing city funds into Bitcoin, proposing that such a move could spark further interest and adoption by other municipalities and governments.
Detailed Analysis:
Taskmaster 4450 delves into the recent market situation, describing a day filled with red across various sectors, including stocks, gold, oil, and particularly Bitcoin. He reflects on the importance of having a long-term perspective during market fluctuations and shares the drastic impact on his retirement and other accounts due to the recent market downturn.
The discussion shifts towards the events of March when Bitcoin plummeted to $3,000 amid a broader market crash, highlighting the flight to the US dollar as a safe haven at that time. Task raises the question of whether Bitcoin will demonstrate a similar correlation with traditional markets in future downturns, especially given the increasing institutional interest in the cryptocurrency.
Task emphasizes the significant institutional involvement in Bitcoin, especially by grayscale, with a recent surge in Bitcoin purchases exceeding mined amounts. He discusses the trend of institutions moving towards long-term investments in Bitcoin, underlining the change in perception of Bitcoin as an asset class among heavy-hitting investors.
Furthermore, Task explores the potential scenario of Bitcoin acting as a safe asset class during market downturns, speculating on whether institutions would shift their focus to Bitcoin amid falling equity markets. He predicts that Bitcoin may experience an impact from market downturns but suggests that buyers, particularly institutional investors, would quickly step in, limiting the duration of any negative effects.
An interesting point raised by Task is the mayor of Miami's proposal to invest city reserve funds into Bitcoin, potentially setting off a chain reaction among other cities and even governments. He concludes by expressing optimism about Bitcoin's future, emphasizing its growing support from institutions and the possibility of sustained buying activities during market dips.
In summary, Task's analysis offers insights into Bitcoin's evolving role in the investment landscape and its potential to become a safe asset class during market uncertainties. Through discussing institutional interest, market correlations, and governmental involvement, he paints a picture of Bitcoin's increasing legitimacy and resilience in the face of market volatility.