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It seems Ethereum, Bitcoin and Litecoin are correlated but how will they do with a stock market downturn?

by justinzollars 9y ago

fullshark 9y ago
My guess is they will tank since their value is driven by speculation right now.
- lagadu 9y ago
  Hard to say, more and more BTC in particular is being used as a shelter from the woes of fiat currencies. It's not the first time that a downturn in a fiat market leads to btc price increases as some players exchange their assets for btc.
  - fullshark 9y ago
    I think that use case is oversold in terms of what's driving the price up this year.
  - nylonstrung 9y ago
    How can you identify what growth is a 'shelter from fiat' vs mere speculation on technology ect when it's growing super fast all the time? There's no correlation with fiat currency value (except maybe in Venezuela) as far as I can tell
- ericb 9y ago
  So far I believe cryptocurrency is one of, if the not the most, uncorrelated asset class. https://www.forbes.com/sites/laurashin/2016/06/02/4-reasons-why-bitcoin-represents-a-new-asset-class/#58b8d2873426 https://www.forbes.com/sites/laurashin/2016/06/02/4-reasons-...
  - fullshark 9y ago
    Yeah cause it's going through wild price swings due to idiosyncratic factors (Mt Gox, "Civil War", Coinbase decreasing purchasing frictions etc) which are pretty orthogonal to the stock market. Regardless I think the wild price ride crypto has been on this past year is primarily driven by speculation (and possibly market manipulation), and as such when the recession comes and investors face a liquidity crunch they will sell their BTC.
  - justinzollars 9y ago
    But they seem to be correlated with one another - look at the similarity between ETC, BTC and LTC
nylonstrung 9y ago
Probably poorly given they have a disproportionate number of retail investors and if these people lost their jobs crypto would undoubtedly be the first thing they liquidate to make ends meet. It also is unequivocally correlated to the market no matter what people will say.

It seems Ethereum, Bitcoin and Litecoin are correlated but how will they do with a stock market downturn?

fullshark 9y ago

My guess is they will tank since their value is driven by speculation right now.

lagadu 9y ago
Hard to say, more and more BTC in particular is being used as a shelter from the woes of fiat currencies. It's not the first time that a downturn in a fiat market leads to btc price increases as some players exchange their assets for btc.
- fullshark 9y ago
  I think that use case is oversold in terms of what's driving the price up this year.
- nylonstrung 9y ago
  How can you identify what growth is a 'shelter from fiat' vs mere speculation on technology ect when it's growing super fast all the time? There's no correlation with fiat currency value (except maybe in Venezuela) as far as I can tell
ericb 9y ago
So far I believe cryptocurrency is one of, if the not the most, uncorrelated asset class. https://www.forbes.com/sites/laurashin/2016/06/02/4-reasons-why-bitcoin-represents-a-new-asset-class/#58b8d2873426 https://www.forbes.com/sites/laurashin/2016/06/02/4-reasons-...
- fullshark 9y ago
  Yeah cause it's going through wild price swings due to idiosyncratic factors (Mt Gox, "Civil War", Coinbase decreasing purchasing frictions etc) which are pretty orthogonal to the stock market. Regardless I think the wild price ride crypto has been on this past year is primarily driven by speculation (and possibly market manipulation), and as such when the recession comes and investors face a liquidity crunch they will sell their BTC.
- justinzollars 9y ago
  But they seem to be correlated with one another - look at the similarity between ETC, BTC and LTC

nylonstrung 9y ago

Probably poorly given they have a disproportionate number of retail investors and if these people lost their jobs crypto would undoubtedly be the first thing they liquidate to make ends meet. It also is unequivocally correlated to the market no matter what people will say.