After a nice bull market, the Dow Jones Industrial Average has been going through some rough weeks. Crypto-currencies are also experiencing corrections. Is there a connection between the two investment worlds?
When approaching each area of investment, we need to be careful about using vague terms, such as "bull market and bear market." The main reason for this is that in the incredible "bull market" of 2017, crypto-currency gains far exceeded 10 times. If you invest $1000 in Bitcoin at the beginning of 2017, your earnings will exceed $10,000 by the end of the year. Traditional stock market investing has never been like this. In 2017, the Dow Jones index rose about 23%.
The recent crash shocked many newcomers to the crypto-currency camp. What they heard was how all these early adopters got rich and bought Lambos. For experienced traders, this type of market correction is obvious because of the increase in prices over the past few months. Recently, many digital currencies have turned many people into millionaires overnight. Obviously, sooner or later they will want to take some profit off the table.
I think another factor we really need to consider is the recent increase in Bitcoin futures trading. I personally think that the main force here is led by the vanguard, and they want to see the crypto-currency fail. I also think that futures trading and enthusiasm for crypto ETFs is a positive step towards crypto integration and is considered a "real" investment.
Obviously, the link between similar outcomes between two worlds is uncertainty.
We all know that the market does not like uncertainty. But uncertainty is fleeting. The cause of anxiety can happen one day and sometimes be resolved overnight. Sometimes the news is so alarming that it paralyzes the market for months or even years.
The key is to carefully check all this information and determine what is true and what is not.
Because I am interested in both stocks and crypto-currencies, I think it can be very beneficial to pay close attention to both. There are profit opportunities almost every day. This is especially true in crypto-currencies, as I've often bought a coin that had just dropped 30% in the last day, and then another 30%, only to find all that and more in a week.
I recommend keeping it diverse as needed (depending on each person's situation). Sometimes one is above and the other is below. As a morale booster, I'm very happy to be able to log into the top performing account today. If you have an account in both areas, you can connect with this one.
Certainly, crypto-currencies will continue to exist and will certainly make investments more valuable.
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