What impact will a collapse of the US stock market have on the crypto market?
First, let's make an assumption: if a global financial crisis occurs again, how will the price of Bitcoin move? Will it become a safe haven as some say, comparable to gold or surpassing gold in its hedging properties?
Currently, the crypto market is becoming increasingly similar to the US stock market, and this trend will likely worsen in the future. However, to completely attribute market movements to this would be absurd. As a high-risk financial asset, Bitcoin is susceptible to various influences, not just the policies of the Federal Reserve; there are numerous factors at play behind the scenes. As retail investors, trying to predict and assess the market based on Federal Reserve policies, on-chain data, etc., is akin to seeking a sword on a boat, with no future.
As I write this, I'm considering a question: does the crypto market still look the same as it once did? Is it a four-year cycle? Will it be replaced by a long bullish mindset similar to the US stock market, but with a steeper upward slope? The specific rhythm would be: platform/small pullback, big rise, platform/small pullback, big rise...
In my view, in any market, regardless of how strong the economy is, when the overall valuation of your market is at a relatively high level, it poses a risk. Conversely, even the worst markets present opportunities when their valuations are relatively low.
You are not a gambler; the longer you hold, the greater your chances of success, but you must choose the right market, such as the US stock market and the crypto market, excluding the A-share market; this brings me to an app I have been using, #biyapay . For us users in mainland China, it is usually not possible to buy US stocks. Opening an account in the US seems quite difficult; entrusting a Hong Kong company to open an account is very troublesome. However, Biyapay makes it very convenient to buy US and Hong Kong stocks, even including transferring USDT from the crypto market.
Returning to the fundamental issue, comparing the crypto market to the US stock market, specifically using the Nasdaq and the S&P 500 for comparison, we can clearly see a significant gap in correlation. The main reason for this is that the narratives of the crypto market and the US stock market are completely different; the US stock market focuses more on fundamentals and macroeconomic factors. In contrast, the crypto market lacks an independent narrative and does not gain traction solely because of good performance. In fact, Bitcoin has seen almost no change in its own narrative from the time of the halving until now, relying entirely on FOMO sentiment.
Unless the crypto market develops its own narrative, I believe that for a long time, the positive correlation between these two will remain very high...
