Is There a Correlation Between The Dow Jones & Cryptocurrency?

Cryptocurrency also is experiencing a correction. Could there be a correlation between the two investment worlds?

We need to be careful using vague terms like”bull and bear markets” when crossing over into every investment area. The most important reason behind this is that cryptocurrency over the span of its amazing 2017″bull run” saw profits of well over 10x. If you put $1,000 into Bitcoin at the start of 2017 you would have made well over $10,000 by the end of the year. Conventional stock investing hasn’t experienced anything like that. In 2017 the Dow increased roughly 23%.

I’m very cautious when reviewing data and charts because I realize that you can make the numbers say what you want them to say. Just as crypto saw enormous profits in 2017, 2018 has witnessed an equally speedy correction. The point I’m attempting to make is that we need to try to be objective in our comparisons.

Many which are new to the cryptocurrency market camp are shocked at the current crash. All they’ve heard was how these early adopters were becoming rich and purchasing Lambos. To more experienced dealers, this market correction has been pretty obvious due to the skyrocketing costs over the last two months. Many electronic monies recently made many folks overnight millionaires. It was evident that sooner or later they’d want to take a number of that profit off the table.

Another factor I think we really must take into account is the recent inclusion of Bitcoin futures . I personally believe there are major forces at work led by the old guard that need to see crypto neglect. In addition, I see futures trading as well as the excitement round crypto ETFs as positive steps toward creating crypto mainstream and considered a”real” investment.

Imagine if bad news on Wall Street impacted crypto markets such as Coinbase and Binance? Could it cause them to fall on precisely the exact same day? Or what if the opposite were true and it caused crypto to increase since people were looking for another place to park their money?

In the spirit of not attempting to skew the numbers and to remain as objective as you can, I wanted to wait till we saw a comparatively neutral playing field. This week is all about as good as any as it represents a time period when both markets watched corrections.

For those not knowledgeable about cryptocurrency trading, unlike the stock market, the trades never close. I’ve traded shares for over 20 Decades and understand all too well that feeling where you are sitting around on a lazy Sunday afternoon believing,

“I really wish I could trade a position or two right now because I know when the markets open the price will change significantly.”

This Walmart-like availability can also lend to knee-jerk emotional reactions that may snowball in either way. Together with the traditional stock exchange people have a chance to hit the pause button and sleep in their decisions overnight.