There are some rumors about the interconnection of Bitcoin and the whole stock market. Find out three possible ways in which cryptocurrency can affect the global trade market.
There have been rumors that are hovering around that even the Bitcoin crash can affect the Trade Market. These rumors are hardly believable. But what if the rumors are true? Then what? Will you be able to take Bitcoin trade lightly?
If we look into the past and go through the records, you will be able to see that technological assets once held the most economical value in the 1990s. The same thing can be said for the cryptocurrency. If we see the market value of the cryptocurrencies all over the world then you will find out that the whole value is less than that of one single company: Microsoft.
According to Jeffrey Kleintop, for the cryptocurrency to become one of the major pillars to hamper the stock market, it needs to become an asset that is present in the household or have the asset of the leveraged investors like Central Banks.
However, if you look at all the known possibilities of the cryptocurrencies, there are three possible ways that can affect the stock market after the burst of the cryptocurrency trade.
And if you do not want the stock market to crash, then be a part of the cryptocurrency trade with the help of the Bitcoin Pro App and support the market so that it never crashes.
Scenario 1: When Investors Lose Their Confidence
The real reason why the market value of the Bitcoin is rising is solely for the fact that traders and investors believe them to be true. This can be proven by the fact that the value of the Bitcoin started accelerating after 2017 when the value of it reached the peak market value to almost $20,000.
If we take the Bitcoins in that sense, then we can say that they have a tangible value. The traders who were afraid of making bigger deals are now fearless trading with larger amounts. It is all thanks to the Bitcoins that have made the trader accustomed to high volatility.
So what happens if all the traders worldwide lose their confidence in making bigger deals. Yes, you guessed it correctly. The trader’s psychology will take damage. Instead of effecting directly, the cryptocurrency trade crash will have a domino effect on traders’ psychology.
Scenario 2: Company Jumping to Bitcoin Investment Just Before Bitcoin Trade Crash
There was a time that even adding “.com” at the end of the site or publishing a sentence in the press of opening an eCommerce website would rile up the stock market. Well, that was one of the strategies used in the 1990s to swing the flow of the stock market to one’s advantages.
If you see today, a similar thing is happening with the cryptocurrency. And this situation is making the companies act according to the cryptocurrency trade market. Recently, the Imaging Company Eastman Kodak invested its every saving in launching its own cryptocurrency “Kodakcoin”. This cryptocurrency allows the photographer to sell their photograph rights for Kodakcoin and received payment by the blockchain technology.
Since the decision of launching their own cryptocurrency, the Imaging Company Eastman Kodak shares have been tripled in value.
Scenario 3: When Cryptocurrency Crash Has a Wile E Coyote Effect
In a conference, Jack Ablin compared the cryptocurrency to cartoon characters, where he said that when the cartoon character realizes that they have jumped too far, they slowly start to move down to a safe position. The same thing happens with the cryptocurrency trade market.
For instance, the financial crisis of 2007 that shook the whole trading industry, is considered never to be what it was once. But see here we are trading in the same stock market and earning more profits than ever.
Final Thoughts
With that being said, it is still too soon to predict how the cryptocurrency trade will affect the stock market. But one thing is for sure that cryptocurrency is going to be around for a longer period of time.
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