4 ms·

Why might this be affecting BTC?

by triyambakam 2y ago

seper8 2y ago
Why wouldn't it?
treme 2y ago
Many investment strategies involve burrowing yen at low interest rate to place else where with higher roi.
BLKNSLVR 2y ago
My media's telling me that US recession fears are affecting US stocks. And when US stocks are affected, the effect on cryptocurrencies is generally magnified since cryptocurrency is viewed as a risk asset, so one of the first to be sold off in a panic.
- Aardwolf 2y ago
  Do you have a view on which president candidate is causing the biggest recession fears, if any?
  - BLKNSLVR 2y ago
    I think it's just the numbers causing the fear. I actually haven't thought about it in terms of presidential candidate selection. But to engage in conjecture, I'd very uncontroversially say that it's precisely split down party lines - if you're going to vote Democrat then you're going to thing the Republicans are more likely to make recession worse, and vice versa. Personally, I think parties and politicians are somewhat leaves on the stream of momentum and world events. They may have some control of variations in speed and direction, but nowhere near what they're blamed / given credit for. This recession is a predictable outcome of the global shake up caused by COVID, and particularly the money printing / incentive cheques, which was a political decision. But not doing it could have had a worse result, who knows? Japan's situation, Ukraine, and now Israel and Iran, those destabilising forces are going to do more to world economics than any individual politician or country (although the US's influence is outsized).
xyst 2y ago
Whales offloading assets to cover losses, I guess.
pjc50 2y ago
Markets move together, even when they're not "supposed" to.
- Ekaros 2y ago
  I don't find it at all surprising that "tech" "gold" would be correlated with other tech stocks. And tech stocks being so big dominating most of the market. Leading to general correlation between everything. Bitcoin is probably lot less safe heaven than most people invested in it think.
baq 2y ago
BTC is just another asset to diversify into, so it'd be really weird if it wasn't affected by global deleveraging and some margin calls, even if tradfi.
- TMWNN 2y ago
  It occurs to me that BTC behaving this way is a good thing in the long term, because it means that people are treating it like other asset classes—something to rotate in/out of as appropriate—as opposed to its own thing (which, in this context, means "different"/"bad")
cabby 2y ago
Correlation vs causation
wcoenen 2y ago
Selling of all risky assets tends to be correlated. It's called "risk off" sentiment. This happens because when one asset drop in price, leveraged investors (i.e. those who borrowed to buy) may get "margin calls" from their lenders. This means that the total value of their portfolio (when including the loan) is in danger of going negative, and they may need to sell everything.
- triyambakam 2y ago
  Thanks for explaining those terms, very helpful!
sph 2y ago
This is good for Bitcoin. (in the longer term)
- triyambakam 2y ago
  Could you elaborate on why? I can't infer

Why might this be affecting BTC?

seper8 2y ago

Why wouldn't it?

treme 2y ago

Many investment strategies involve burrowing yen at low interest rate to place else where with higher roi.

BLKNSLVR 2y ago

My media's telling me that US recession fears are affecting US stocks. And when US stocks are affected, the effect on cryptocurrencies is generally magnified since cryptocurrency is viewed as a risk asset, so one of the first to be sold off in a panic.

Aardwolf 2y ago
Do you have a view on which president candidate is causing the biggest recession fears, if any?
- BLKNSLVR 2y ago
  I think it's just the numbers causing the fear. I actually haven't thought about it in terms of presidential candidate selection. But to engage in conjecture, I'd very uncontroversially say that it's precisely split down party lines - if you're going to vote Democrat then you're going to thing the Republicans are more likely to make recession worse, and vice versa. Personally, I think parties and politicians are somewhat leaves on the stream of momentum and world events. They may have some control of variations in speed and direction, but nowhere near what they're blamed / given credit for. This recession is a predictable outcome of the global shake up caused by COVID, and particularly the money printing / incentive cheques, which was a political decision. But not doing it could have had a worse result, who knows? Japan's situation, Ukraine, and now Israel and Iran, those destabilising forces are going to do more to world economics than any individual politician or country (although the US's influence is outsized).

xyst 2y ago

Whales offloading assets to cover losses, I guess.

pjc50 2y ago

Markets move together, even when they're not "supposed" to.

Ekaros 2y ago
I don't find it at all surprising that "tech" "gold" would be correlated with other tech stocks. And tech stocks being so big dominating most of the market. Leading to general correlation between everything. Bitcoin is probably lot less safe heaven than most people invested in it think.

baq 2y ago

BTC is just another asset to diversify into, so it'd be really weird if it wasn't affected by global deleveraging and some margin calls, even if tradfi.

TMWNN 2y ago
It occurs to me that BTC behaving this way is a good thing in the long term, because it means that people are treating it like other asset classes—something to rotate in/out of as appropriate—as opposed to its own thing (which, in this context, means "different"/"bad")

cabby 2y ago

Correlation vs causation

wcoenen 2y ago

Selling of all risky assets tends to be correlated. It's called "risk off" sentiment. This happens because when one asset drop in price, leveraged investors (i.e. those who borrowed to buy) may get "margin calls" from their lenders. This means that the total value of their portfolio (when including the loan) is in danger of going negative, and they may need to sell everything.

triyambakam 2y ago
Thanks for explaining those terms, very helpful!

sph 2y ago

This is good for Bitcoin. (in the longer term)

triyambakam 2y ago
Could you elaborate on why? I can't infer