If the U.S. stock market crashes due to "good news being exhausted", will the cryptocurrency market follow suit or act as a safe haven?
J.P. Morgan indicates that the U.S. stock market, which has been setting new highs this year, may decline next week due to the Federal Reserve's rate cuts and the exhaustion of good news, and suggests increasing gold holdings for safety. The cryptocurrency market has always been closely linked to the U.S. stock market and other traditional financial markets, with fluctuations in the stock market often influencing the flow of funds in the crypto space.
In simple terms, the relationship between the U.S. stock market and the cryptocurrency market is more like that of "big brother and little brother"—many investors are involved in both stocks and cryptocurrencies. If a significant drop in the U.S. stock market triggers panic, most people will sell risk assets, including cryptocurrencies, to cash out, and the cryptocurrency market will likely follow suit with potentially more severe declines.
However, there are also exceptional cases: if the U.S. stock market falls too sharply and the market loses confidence in the Federal Reserve's ability to stabilize it, a small amount of capital may view Bitcoin and other cryptocurrencies as "digital gold" or a new choice, attempting to flow into the crypto market for safety. However, this shift in sentiment has a high threshold and is not the norm.
Additionally, the cryptocurrency market has its own "independent temperament". Internal factors such as Bitcoin halving, Ethereum upgrades, and changes in regulatory policies can also impact cryptocurrency prices, and the market is not entirely dependent on the U.S. stock market.
In summary: if the U.S. stock market crashes due to "good news being exhausted", the cryptocurrency market is likely to decline simultaneously under the influence of panic and capital withdrawal (with negative implications being predominant); the likelihood of acting as a "safe haven" is extremely low, and this scenario resembles a low-probability special event. For cryptocurrency traders, it is essential to be cautious of short-term volatility risks.
