US Stocks Dip on New Trade Tensions; Should Investors Move To Bitcoin?

As reported by the Financial Times yesterday,  market participants are not too sure about the latest trade developments between the US and China. Coupled with Washington’s political scenario concerning Trump’s impeachment row, stock prices fell on Friday. Does this mean that bitcoin (BTC) is the obvious alternative now for investors?  

S&P 500 Falls, Nasdaq, and Dow Jones Too

Wall Street stocks took a hit on Friday, in response to latest reports coming from the White House. As per, the Inquirer, the US government is considering restricting American business investment in China and the country’s assets. Plus delisting Chinese companies from US stock markets is also on the cards.

The best stock market and economy in our history was a toss up between the 1950’s-1960’s and the 1990’s.

Trump’s stock market has been flat for 20 months, since he began the trade war. GDP growth last year was sub-3%. Clinton had 4%, so did Eisenhower, in the 60’s it was 5%. pic.twitter.com/wp7ERu4Dby

— Downtown Josh Brown (@ReformedBroker) September 26, 2019

The S&P 500 registered its worst performance in 5 weeks by falling one percent through the week. It closed the day on Friday at 2,961.80, with a 0.5 percent loss. Nasdaq Composite Index fell 1.1 percent to end the day at 7,939.63, and the week with a 2.2 percent drop. The Dow Jones Industrial Average also joined the downhill ride with a 0.5 percent drop to 26,820.25.

BTC Markets Are Shaky At the Moment

As per an analysis published by Bitcoinist a couple of days ago, massive margin call liquidations from Seychelles based bitcoin derivates exchange BitMEX is responsible for the sad state of BTC markets. But there are other possible factors too which might have led to the same.

Zooming out the picture, in the current quarter, it can be seen that bitcoin prices have put up a dismal performance so far. With the latest crash to $7,800, down from recent levels above $10,000, BTC is on track to log the worst third quarter since 2014.

Looks like we are not going to get a green Q3 – good news it's almost over! pic.twitter.com/1ITwdJPOtR

— skew (@skew_markets) September 27, 2019

Atlantic Capital founder, Bruce Fenton added further perspective to this matter in his latest interview with BlockTV. On being asked about his opinion on the latest BTC pullback putting a bad reputation on investment attractiveness in the space, he said the current conditions are part of the natural cycle of cryptocurrency markets.

Nonetheless, Bruce pointed out that it’s a concerning thing. If a lot of investors lose money due to such sporadic volatility, then it turns them off from the market, he said.

The most high-quality coin is bitcoin, and that has the largest market cap. But even bitcoin is still very risky and speculative. It’s a speculative risky asset. I believe in it. I believe in its superior technology. It think we can demonstrate and prove that it is superior technology. But…. superior technlogy doesn’t always win, in terms of economic performance. 

On speaking about BTC’s safe-haven narrative, Mr. Fenton’s said that although he has benefitted from being an early adopter in the top crypto asset, he doesn’t believe in bitcoin being an investment alternative in times of downturn. Although people should have some exposure compared to not having BTC at all.

Bitcoin In Macro Bull Trend & Will Bounce Back Soon

Noted cryptocurrency analyst, Josh Rager came out with a rather positive stance in response to the current bitcoin market situation.

On BTC’s 42 percent pullback over 91 days this year, he opined that this isn’t a big deal, as bitcoin has seen 75 percent pullback to lows coupled with a 1600 percent surge to all-time highs. This phase too shall pass and there will be a great resurgence in buying sentiment in the market in the near future.

Bitcoin 2013 market compared to 2019

2013: Bitcoin bull market pulled back 75% over 89 days before a 1600% run-up to new highs later in the year

2019: Bitcoin has currently retraced 42% over 91 days

Price can continue down but expect the bull trend to continue after pullback pic.twitter.com/gCrC65OJ9N

— Josh Rager (@Josh_Rager) September 28, 2019

Also according to Hans Hauge of Ikigai Asset Management, bitcoin fundamentals are pretty robust and BTC as a solid investment platform is not going anywhere.

Has the current pullback dashed your hopes in bitcoin, or is this another buying opportunity? Let us know your thoughts below. 

Images via Bitcoinist Image Library, Twitter: @ReformedBroker, @skew_markets, @Josh_rager