Bitcoin (BTC) and the stock market have generally moved in parallel this year, but the recent difference in their moves opens up the question of potential crypto price stability and the use of BTC as a store of value and perhaps a better investment overall.
Senior commodity strategist in Bloomberg Intelligence, Mike McGlone, seems to follow a similar line of thinking as he took to Twitter on October 20 Share his opinion of the stock vs. Bitcoin.
McGlone argues that Bitcoin is building a base around $19,000 while the S&P 500 continues to fall in value, raising the question of what will stop stock prices from falling, noting that “Bitcoin at $19,000 could gain the upper hand against the .3600 S&P 500. “
According to McGlone, the price of Bitcoin has never been lower than its 200-week moving average, but the current price is four times lower than it was at the end of the first quarter of 2020, which may be an indication of the continuation of the bull. Market.
Our chart shows that the cryptocurrency has been consolidating just above this level since it first traded there in June, and like most risk assets, it is subject to stock moves, especially if it continues lower. The main question heading into late October is what is stopping the bear market wave, and the Fed is unlikely to be the “Fed”.
What will prevent stocks from falling?
While it’s hard to predict when the stock market will stop falling, news from the Federal Reserve (Fed) about interest rates still tilts toward more big hikes, which should keep stock valuations low.
To this end, McGlone thought:
Further contraction in the S&P 500 could be an important factor in slowing the pace of central bank tightening as the world tilts toward a recession. An extended period of deflation makes sense in the wake of the largest pumping and then dumping of the US money supply in history, which could underpin Bitcoin as a store of value.”
So a hiding place for battered investors may finally be revealed if stocks continue to fall and the price of BTC remains stable. Cryptocurrency markets can provide protection against falling prices for stocks, gold and other assets.
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The published expert says bitcoin at $19,000 may be more attractive to investors than the S&P 500 at $3,600 first appeared on Coinphony.