The last 3 days have not been kind to stock investors.
The Dow has lost over 1000 points since the open on Tuesday. Though to be fair, that is less than a 5% drop.
(Source: https://finance.yahoo.com/quote/%5EDJI?p=^DJI)
In our current environment, 300 point moves seem to be the norm these days as the Dow has been at lofty levels for some time now.
What is interesting this time is that bitcoin is not being dragged down with it.
A few weeks back when the Dow took it on the chin, it also appeared to drag down bitcoin and the entire crypto markets right along with it.
It appeared to be a global risk off trade as every risky asset experienced sharp declines.
This appears to be much more orderly and bitcoin is actually going up as stocks continue to slide:
(Source: https://www.coinbase.com/dashboard)
What happens from here?
The fact that risky assets are not being sold in unison is a good thing, at least for bitcoin.
It means that even if the stock market takes a significant dump, bitcoin doesn't have to go down with it.
In fact, bitcoin may become somewhat of a safe haven if investors are trying to lock in gains in the stock market and look to hide out in something until the storm is over.
As they see bitcoin hanging in there or even appreciating in value, it might attract some capital as a store of value.
Which is good news considering many stock forecasters are forecasting a rocky next few weeks/months for stocks.
Which also means we can probably throw this chart out the window:
(Source: https://www.cnbc.com/2018/02/08/bitcoins-correlation-with-stocks-jumps-to-2-year-high.html)
Bitcoin is likely getting back to it's traditional position of showing almost no correlation to the stock market, if not a slightly negative correlation to stocks.
All in all, I'm looking forward to a good spring in crypto land, regardless of what happens in the stock markets.
Stay informed my friends.
