American stock market drop!Is it problem for crypto?Or it's not our business?

[GR92]

Why are stock markets falling?
For several weeks, economists and analysts have warned that inflation levels in major economies could increase this year beyond the 2% to 3% that central banks believe is good for developed countries. Official US figures turned those concerns into a sell-off last Friday, after they showed average wage rises in the US had reached 2.9%. The data increased fears that shop prices would soon rise further, increasing the pressure for high interest rates to calm the economy down. Investors then bolted at the prospect of an era of cheap money – which encourages consumers and companies to spend – coming to an end. Over the past month, several members of the US central bank, the Federal Reserve, have argued that three 0.25% interest rate rises scheduled for this year could become four or five.

Is there worse to come?
There is every prospect that the US economic data will continue to strengthen, increasing the potential for higher interest rates. President Donald Trump’s tax reform bill, which gained approval in Congress before Christmas, will inject more than $1tn (£710bn) into the US economy, much of it in the form of corporation tax cuts. Many firms have pledged to give a slice of the cash to their workers. Decades of flat wages should mean that increases expected in 2018 and possibly 2019 are too small to trigger a reaction from the central bank, but investors are betting rates will rise. As a consequence, stock market jitters could continue.

Is it a threat to the global economy?
Many developing world economies have borrowed heavily in dollars and will be stung by the higher cost of servicing their debts. On the other hand, a booming US economy will suck in imports from those nations, boosting the incomes of the developing world. However, the eurozone looks unlikely to increase interest rates until its recovery is more firmly anchored. That means the euro will continue to rise in value against the dollar, making it harder for European countries to export to the US.

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[Mihaylovic]

It supposed tto make good affects for cryptocurrencies and actually many people were expecting that some people would shift to crypto market because of this. But crypto market was not enough stable at this time.

[disam]

well it is all connected in a way. In this combined ( stocks + crypto ) market fall, i guess money went for gold as we see from a gold price chart from 15 december till now. So in these times we should patiently wait for money reentering the cryptoland.

[blok]

In a stock market recession, crypto's store of value approach will increase crypto prices.

But there definitely will be a chilling effect for the innovative technological and business processes created by the blockchain.

[qazgroup]

I agree with the second part of your thread title, we should not be concerned about stock market as it is a different market altogether, crypto is the future and soon we will see money flowing back in crypto.

[skan]

one article i read said that due to increasing wage because of the reduced tax rates lead to this decrease in stock market

[johstacy]

In the economy and in the banking system, everything is interconnected. Increasing inflation means that the consumer capacity is decreasing. The collapse of stock exchanges, which are related to the dollar and oil, will certainly affect the cryptocurrency market. They are not directly connected to each other, however, in the financial systems as a whole, they are cogs of one whole. Problems in the monetary sphere in the United States are just as common problems throughout the world. Everything is connected with each other.

[AiwonOleh]

Although these events are not directly related to crypto, but in my opinion they can also make some adjustments to our market, so you need to keep track of all the events taking place in the US.

[GR92]

In a stock market recession, crypto's store of value approach will increase crypto prices.

I don't understand how it depends and why the value of the cryptocurrency should go up?

[GR92]

Although these events are not directly related to crypto, but in my opinion they can also make some adjustments to our market, so you need to keep track of all the events taking place in the US.

There are very sharp reforms in America now and it isn't understandable what will happen next.

[Hemady17]

Why are stock markets falling?
For several weeks, economists and analysts have warned that inflation levels in major economies could increase this year beyond the 2% to 3% that central banks believe is good for developed countries. Official US figures turned those concerns into a sell-off last Friday, after they showed average wage rises in the US had reached 2.9%. The data increased fears that shop prices would soon rise further, increasing the pressure for high interest rates to calm the economy down. Investors then bolted at the prospect of an era of cheap money – which encourages consumers and companies to spend – coming to an end. Over the past month, several members of the US central bank, the Federal Reserve, have argued that three 0.25% interest rate rises scheduled for this year could become four or five.

Is there worse to come?
There is every prospect that the US economic data will continue to strengthen, increasing the potential for higher interest rates. President Donald Trump’s tax reform bill, which gained approval in Congress before Christmas, will inject more than $1tn (£710bn) into the US economy, much of it in the form of corporation tax cuts. Many firms have pledged to give a slice of the cash to their workers. Decades of flat wages should mean that increases expected in 2018 and possibly 2019 are too small to trigger a reaction from the central bank, but investors are betting rates will rise. As a consequence, stock market jitters could continue.

Is it a threat to the global economy?
Many developing world economies have borrowed heavily in dollars and will be stung by the higher cost of servicing their debts. On the other hand, a booming US economy will suck in imports from those nations, boosting the incomes of the developing world. However, the eurozone looks unlikely to increase interest rates until its recovery is more firmly anchored. That means the euro will continue to rise in value against the dollar, making it harder for European countries to export to the US.

The current market drop in cryptomarket is somehow related to the drop in Stock exchange. Those investors for both market are waiting for the development until they going back to invest again in the market. Some of people in this forum make the issue of current drop in the crypto as the end of altcoin is so inimical. It does not help to those new in trader it only cause confusion and fear to the public.

[macchiato]

This event, if true, could have make the crypto market rise. Once stock market drops, investors will divert their attention to a new asset which is timely -crypto. However, it seems like it did not. There are probably more relevant reasons for the drop of cryptocoins. The events in India, China and Korea are more suitable. This does not have enough evidence to be the root cause of sudden drops of coins in the market.