Whenever a person buys a bitcoin or any other cryptocurrency, basically you are investing in a market known as the crypto market. Most of the people think that there must be a relation between the current trend of other markets such as the stock market on the crypto market. And if it so, one must be worried about what will happen to the crypto market if the stock market collapse. Also, before that, one must foresee the chances of the stock market to be crashed in the upcoming years.
Well, in this article we will discuss two things which are anyhow interconnected to each other. The first phenomenon that we are going to discuss is the collapse of the stock market in 2019. Is it going to happen and what are the chances of the stock market crash in 2019? In the next section, we will discuss how if the stock market crashes in 2019, it will uplift the crypto market and bitcoin will rise due to it. So, let us first focus on how the collapse of the stock market is inevitable in 2019.
The stock market going to crash in 2019:
It has been ten years that a stock market crashed. As per the trade experts, the stock market is definitely going to collapse this year. The year 2018 itself was one of the worst years for stock market after 2008. Let us have some facts regarding the stock market current scenario:
- Volatility in 2018: Volatility refers to the degree of fluctuation of a share in the market. The 2018 year was one the year which has very high volatility. This means that the security value of the stocks fluctuated so dramatically and was not steady at all. And as per the analyst, the stock market tends to crash so near when such a high volatile phase is there in the stock market. The volatility was never such before 2008 especially for S&P 500. Even after 2008, a high financial crisis occurred and so as the prediction of the crash of the stock market in 2019 is inevitable.
- 30% crash in Apple: Apple Inc. for the first time in nearly 15 years, faced a downside and even up to such a large extent. This loss was in the region where they have a very high command, in China. As per the officials, they were completely unaware of any such crisis. And if this is the condition of China itself, the global markets are surely going to be affected soon.
- Rising of United States Interest Rates: The interest rate has enhanced around 8 times that is used to be in the United States in 2015. And, this is definitely not a good sign for the stock market. The high interest rates have always lead to financial recession and if this trend continued, surely collapse of the stock market will occur next year.
So, above warnings depicts that a stock market is surely going to crash in 2019. Now, in the next section, we will see how if such a crash happened, it will affect the bitcoin on a positive note.
Why Bitcoin will rise due to stock market collapse in 2019?
First of all, we need to understand that the stock market and the crypto market are connected to the financial components like banks, government policies etc in two different ways. The stock market is highly depended upon the other market components like stocks, equities, banks, government policies etc, whereas this is not in the case of bitcoin.
- Well, if look deep in the case a stock market crashes, certainly bitcoin will rise. If there is a crash, people will look for an alternative to the usual market, after all, it is the hard-earned investment. People will start questioning about the function of the usual stock market and start research on how they can earn more by investing and if there is an alternative for the stock market, it is the crypto market. In the case of the stock market crash, more and more people will tend to the crypto market and eventually, this will help the bitcoin as well as complete crypto space to rise.
- Another hint for the rising in bitcoin is the inverse relationship of the crypto market with the global market. Some believe that a stock market crash was the time which gave the invention of the crypto market. As per the inverse relationship theory by some trade analyst between the global market and crypto market, as there is downhill in the stock market, the other one will definitely rise. A stock market can encourage the investors to buy more and more cryptocurrencies as a safe asset, like once gold used to be.
- The entry of institutional money in the crypto market. We have been listening to the rumors of the entrance of this big money in the crypto market for a very long time. Now, if a crash happens in the stock market, definitely it will lead more and more investors to invest the institutional money in the crypto space. Eventually, the crash will enhance the extent of investment of institutional money into crypto space which is a good sign for Bitcoin and other digital currencies.
So, on a short note, bitcoin can surely rise if the stock market collapse in 2018. What are your thoughts on the same? Tell us in the comments section below.