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Stock Market Plunges But Has No Impact on Crypto

Analysts stated that Asia markets are more vulnerable than the US if the stock market crash of the US is to intensify, given the gradual decline in the growth rate of China’s economy.

“Then, there are worries about what’s happening abroad. China, the world’s second-biggest economy, is showing slower growth. Last week, it reported economic growth of 6.5 percent in the third quarter, falling short of expectations. And it has been drawn into a trade dispute with the U.S., with each side digging in on tariffs on billions of dollars of each other’s imports.”

This week, the US stock market deleted all of its gains made in 2018 amidst a major sell-off. The crash had no impact on the crypto market, showing no signs of inverse correlation.

Possibly affected by the trade war between China and the US along with the increase in Fed rates, the US stock market suffered one of its worst short-term crashes in recent history.

Cryptocurrencies like Bitcoin and Ethereum possess fundamentally different catalysts that affect their prices on a regular basis in comparison to the global stock market and traditional assets.

Analysts expected the cryptocurrency market to increase in value more so when reports were released that Asia markets are likely to suffer a harder crash than the US stock market in the days and weeks to come.

Kathy Lien, managing director of FX strategy at BKAM, stated:

“It’s not in an environment of positive growth trend so the pressure will be exacerbated in the emerging markets compared to the U.S. market. Unfortunately, this is the beginning. I think that when we get sentiment shifts like these, they always last longer than we would like to see and we could see the selling continue for some time.”

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