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Ask HN: Why are crypto markets down?
Really just curious -- you would think this type of uncertainty that is bringing down the stock markets would have people hoarding crypto. Why isn't that happening?
- tentboy 7y agoBecause despite cryptos intended usage, most people buy it as an investment - and are trying to cut their losses as it declines
- liquid153 7y agoPeople may sell their crypto to cover their shorts in the stock market.
- detaro 7y agoTheory: Do you expect there's a risk you're going to need to money you put in crypto soon? If yes, would you rather turn it to cash now, or after the price has fallen further?
- sloaken 7y agoSeveral coins are tied to the price of energy, as you mine coins. With oil prices collapsing because of the Russia / Saudi fight the price of energy should go down.
- JohnFen 7y agoI would be very nervous about keeping money in cryptocurrency form if that money is something the I expect I'll need access to suddenly. If the economy crashes hard, I expect it would become extremely difficult or expensive to convert cryptocurrency to cash.
- companyhen 7y agoOne theory: Institutional investors getting into crypto the past couple years made it more correlated to traditional financial markets. Also could be due to leverage trading becoming super popular the past year or two.
- runawaybottle 7y agoBecause it is a mostly speculative investment. Also because we deep down all know a flu like virus shouldn’t be tanking the global economy, but it is, and we simple don’t know how to measure irrational fear. It’s inertia at this point, we’ll snap out of it when we all suddenly realize ‘ah, ok, so Cruises? Remember those? I’d like to go on one of those again, weird how we thought those companies would go bankrupt, guess we all got a little weird there for a bit’. There’s no rhyme or reason to this, Bitcoin is in flux just like everything else.
- duxup 7y agoThe actual usage of crypto is as an investment just like stock. It doesn't matter what the ethos behind Bitcoin is, if the market uses it like an investment just like stocks, then that's what it is, and that's how it will behave.
- lucozade 7y agoI'd expect there are 2 main reasons. The first is that investors requiring cash to cover margin calls for all the other markets that are tanking. This is likely to be a reason for the big drop in gold prices yesterday. The second is a general flight to quality as evinced by the drops in Treasury yields in US, UK and Germany. Or it could be wibble. It's crypto so we'll never actually know.
- raincom 7y agoPretty simple: More sellers than buyers. People of libertarian bent have already loaded up with Cryptos. Not many buyers left. You can see a similar thing with Gold, and gold miners as well.