Bitcoin Vs. Dow Jones: Which Will Fall or Recover First?
As the Dow Jones 30 stock index enters correction territory, cryptocurrencies will have to show if they have a different direction of development.
The eyes of the cryptocurrency world have been on the stock exchange indexes for a while. As the Dow Jones continues to slide from the rapidly achieved peak levels, it remains to be seen if Bitcoin can resume the upward trend. The crypto markets have benefitted from the general economic upturn in the past years, but now it remains to be seen if they are vulnerable to a worsening mood on the stock exchanges.
At this point, the possibility for a bear market is not excluded, as moods seem to be shifting quickly. The world of cryptocurrencies is much more volatile, and the lack of regularly spiking coins and high performance may discourage investors.
As someone who lived through the $BTC bear market of 2014/2015 I’m not worried. But I’m sure this is very hard for those new to $crypto who haven’t seen this kind of downturn before. Just be patient and look for solid projects you can enter cheap. This is where the money is made.— QuadraQ (@QuadraQ) January 16, 2018
Then, there is also the possibility that as the stock market underperforms, the crypto market may be seen as an alternative and institutional money to slowly start seeping in:
If you don't think money will be looking to get into $crypto during the upcoming long term #WallStreet #bear #market, then you aren't paying attention. #crytpcocurrencies #bitcoin $btc https://t.co/C2SPJamiAJ— Christopher Inks (@TXWestCapital) February 8, 2018
The crypto market has made forays into traditional investing, despite the lack of full acceptance. Yet for now, the Twitter community is mentioning the "bear market" theme ever more often.
From September onward, the prices of most coins slid significantly, and yet December brought robust gains. However, as the new year moves into the second month of sliding prices, more and more talk is given to price movements resembling the long years of low prices between 2014 and 2016.
I think the likelihood of a year+ long $crypto bear market (like in 2013-2014) is quite unlikely due to the network effect. There is exponentially more buying power chomping at the bit to get in today than there was in 2013 or 2014.— CoinHoarder (@DecentralizTech) February 3, 2018
Given that the Dow Jones 30 index is much less volatile, losses in crypto coin may be steeper. Also, given that newcomer investors are used to high returns, the slide in prices may test the patience of many.
Others believe the crypto world moves much faster, and this time, the cool-off period would not take years, going for a much faster recovery. The most recent downturn of the markets combines the January sell-off with a few additional factors, such as the collapse of the BitConnect pyramid scheme, the additional talks of restrictions in China and Korea, as well as the fallout after a manic rush to crypto in December, when media hype invited brand-new speculators.