What will happen when the stock market crashes?

[Kemarit]

bitcoin market is still young and small, so we have no way of knowing how it is going to react to different incidents and we have already seen that there are irrational behaviors in the market from time to time reacting to things they shouldn't react to and going in opposite directions of logically expected before.

Correct, sample size of crypto is small that we can't used it a basis let's say the looming financial crisis or when the stock market crashes. So for now, we really don't know what's going to happen. Maybe some of them will moved to crypto as hedge or just will liquidate their assets.

I'd say anything is possible but my guess is that two scenarios are more possible than others. bitcoin is either not going to be affected at all and continues on the trend that it was on at the time of stock market crash or it will take a positive effect meaning its rise will become faster.

Let's see if either scenario will happen. For one, I don't see any correlation, but as you have said, in times of crisis people do irrational behavior just to survived and we might see a few shifting their funds to crypto or just go for precious metals as leverage.

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[iqlimasyadiqa]

When wealth is threatened, people generally make reactionary and unpredictable moves.  If anyone here could tell you with any certainty how it would affect Bitcoin, they probably wouldn't, because it might impact the profit they could potentially make by reading the market correctly.  Just place your bets and hope for the best.  

Panic is a serious problem when we all face a market downturn, even though we should remain calm and trust the Coin. panic will only make the situation worse and we should instead support by increasing financial transactions with the coin. market crashes will always occur and we must respond to them as well and as calmly as possible.

[el kaka22]

Well, I don't think the crypto market will or can ever crash, because the truth is that we have a lot of persons looking for the price of bitcoin to dip to $100 so that they can make purchase of as many bitcoin as possible, this is the reason why the price of bitcoin can never fall to zero since it is so valuable to a lot of persons in the world and it's not just used for a means of payment but also a store of value.

Bitcoin is truly the digital gold of the physical gold we know about and I am 100% sure that crypto is going nowhere, in short the crypto market is going to surpass the regular stock market.

[oriontab]

Stocks and crypto-currencies are not positively correlated, that is why Cryptos are viewed as a very good class for portfolio diversification. The tendency is higher that as the stock market crashes, investors will look for alternative assets to hedge their funds.Possibly that is the reason there was a lot of interest from Wall St.to trade derivatives off bitcoins. A lot of fund managers already have some portion of their assets in Cryptos,albeit a tiny fraction. We will likely see more growth in these as the Cryptosspace evolves

[gilangIDR]

When wealth is threatened, people generally make reactionary and unpredictable moves.  If anyone here could tell you with any certainty how it would affect Bitcoin, they probably wouldn't, because it might impact the profit they could potentially make by reading the market correctly.  Just place your bets and hope for the best.  

This is very true such that "panic selling" is one of the biggest problems when the market is down.
People tend to do the same thing with crypto and freak out rather then just turn off your computer and live another day.
Better to be in this for the long-term reward then just the sudden wealth mentality.

Yes, it's true that a trader's mentality should make a trader think much better. Lots of traders and Bitcoin owners experience tremendous panic when the market crashes. Even though such things should be dealt with with a much calmer attitude. Changing market cryptocurrencies are unavoidable risks, so when something happens, try to think more and make decisions with various considerations.

[beerlover]

bitcoin market is still young and small, so we have no way of knowing how it is going to react to different incidents and we have already seen that there are irrational behaviors in the market from time to time reacting to things they shouldn't react to and going in opposite directions of logically expected before.

Correct, sample size of crypto is small that we can't used it a basis let's say the looming financial crisis or when the stock market crashes. So for now, we really don't know what's going to happen. Maybe some of them will moved to crypto as hedge or just will liquidate their assets.

I really didn’t read my own meaning to it this way but he might actually be right, though this can only happen if the stock market falls beyond control and panic which I have never seen any major stock market fall beyond control but this action can actually force many investors into the cryptocurrency investment as majority of them all their lives has been used to one major form of investment or the other.

Since cryptocurrency, especially bitcoin which is the most popular blockchain investment now, and once bitcoin increases as a result of this act, many other cryptocurrency will follow behind too, aside this point you mentioned, I don’t see any correlation too.

[adzino]

There might be a reason why bitcoin follows the stock market crash. As soon as the stock market starts to crash and reach its minimum position, people finds a chance to invest on those stocks for cheap. Thus, they get out of bitcoin investment by selling their bitcoins and slowly jumps into the stock market. As a result, the price of bitcoin also starts to fall. This is just a theoretical assumption I am giving. There might be some other underlying reason behind this crash.

[soxxx]

Trump just attacked the FED again. Time for the FED to go, imagine if Trump finally rids the world of the FED!?!?

[shesheboy]

There might be a reason why bitcoin follows the stock market crash.

huh ? both are not simillar so how can you say that  bitcoin follows the stock market ?

As soon as the stock market starts to crash and reach its minimum position, people finds a chance to invest on those stocks for cheap. Thus, they get out of bitcoin investment by selling their bitcoins and slowly jumps into the stock market.

no i dont think so . why would they sell thier cryptos just to shift on stocks ? when we know that cryptos are more valuable as it can provide better income compare to stocks although stocks might be more stable .

As a result, the price of bitcoin also starts to fall. . There might be some other underlying reason behind this crash.

the crash of bitcoin is caused by other reasons such as fuds/speculations/news   , manipulation caused by whales , or people that simply sells their bitcoin because they badly need a cash .

[figmentofmyass]

There might be a reason why bitcoin follows the stock market crash.

huh ? both are not simillar so how can you say that  bitcoin follows the stock market ?

i don't see the stock market as leading bitcoin. it's more that they are correlated because they are both directly affected by some of the same global economic factors. the idea of "risk-on risk-off" is illustrative of the connection:

Risk-on risk-off is an investment setting in which price behavior responds to and is driven by changes in investor risk tolerance. Risk-on risk-off refers to changes in investment activity in response to global economic patterns. During periods when risk is perceived as low, the risk-on risk-off theory states that investors tend to engage in higher-risk investments; when risk is perceived to be high, investors have the tendency to gravitate toward lower-risk investments.

Investors' appetites for risk rise and fall over time. At times, investors are more likely to invest in higher-risk instruments than during other periods, such as during the 2009 economic recovery period. The 2008 financial crisis was considered a risk-off year, when investors attempted to reduce risk by selling existing risky positions and moving money to either cash positions or low/no-risk positions, such as U.S. Treasury bonds.

so it's not that bitcoin follows stocks. it's that both markets are high risk and are likely to decline during "risk-off" periods like during/after financial crises and recessions.

[LUCKMCFLY]

Hi everyone,

I have been reading a lot about correlation between stock market and crypto. As we have seen in recent months, when the stock market crashes, BTC follows.

BTC seems like have bottomed after more than 85% crash from $20,000 and, comparing with past bubbles like the previous one when the price topped at $1200, everyone think that BTC will have another similar bubble. But that happened in one of the longest bull cycles in stock market. This time, the potential run for crypto would have to happen in the middle of very probable bear market for stocks and nobody knows how BTC will be affected by it.

Some think BTC will raise because people will take it as Gold and as a reserve of value. Other think that it will fall as well because of the panic selling and people only wanting to have cash in hand...

What's your opinion about this?

I believe it could be a huge obstacle in the run to $100,000 in this new potential bubble...

Thanks

The Stock Market is very different from the Crypto market, I think that the Stock Market moves much slower than the volatile Bitcoin market, by doing an analysis you can see that both for the Stock Market and for the Bitcoin shares, they have phases of the student market, which are, accumulation and distribution, bitcoin is far from being a bubble; Currently, following Wyckoff's philosophy, we are in the accumulation phase. And as stated in the book "A Random Walk by Wall Streeth" the bubbles have periods of total crash, if we compare with bitcoin is still far from getting there.

[David1989]

Stock market crashing hard these last three days and BTC exploding. Very interesting.

Opinions?

[David1989]

Anyone?

[David1989]

Stock market continues crashing and BTC running

[Artemis3]

BTC seems like have bottomed after more than 85% crash from $20,000 and, comparing with past bubbles like the previous one when the price topped at $1200, everyone think that BTC will have another similar bubble. But that happened in one of the longest bull cycles in stock market. This time, the potential run for crypto would have to happen in the middle of very probable bear market for stocks and nobody knows how BTC will be affected by it.

Some think BTC will raise because people will take it as Gold and as a reserve of value. Other think that it will fall as well because of the panic selling and people only wanting to have cash in hand...

What's your opinion about this?

I believe it could be a huge obstacle in the run to $100,000 in this new potential bubble...

I have seen people flee from stocks and get into crypto in those situations, but the usual is metals like gold and silver. I don't see any direct correlation with stock market which is playing by the rules of bubbles and crashes from the Chicago school with deflationary currency which go closer to the ideals of the Austrian school (which prevents bubbles from forming in the first place).

If the stock market crashes, bitcoin will not be dragged with it. It might be affected, but not as much as you seem to think...

And i don't think bitcoin will reach $100k anytime soon, unless the USD collapses.

[WinslowIII]

Stock market will be pumped with fiat created out of thin air and added to the debt for quite some time to come, until the value of the dollar evaporates from hyperinflation or the US defaults on the ever rising debt.

[David1989]

Another huge red day for the stock market and green for crypto

[Adriano2010]

If that happen i think that crypto market will grow, because people will search where to store there money better and better invest on crypto then to lose a lot of value holding fiat.