Talk about market equity evaporating before us. Over 5 Trillion dollars has been erased from the markets since February 1st with around 2.5 Trillion being erased in the USA alone. Not only this, 24 billion has flowed out of the Exchange Traded Funds (ETF) market alone. The fear on the street is “It Ain’t over Yet!”, and yet the fake news that is constantly thrown across crypto sites is that many nations are concerned about bitcoin and its affect in the financial markets and are looking for tougher regulations. But the truth is that the furthest thing on the minds of Countries right now is Bitcoin period! We are in the midst of rising rates, rising inflation, coupled with an equity meltdown, a potential derivatives market collapse, and you really think that the central banks of the world are worried about the 400 billion dollar market?
With carnage in the markets you would think that gold would be bullish. Quite the opposite, it’s down with equities. Now much of this is simply institutions that use gold for a hedge are now selling to cover their margin calls. However with all the wreckage in the markets smaller investors as well as larger investors are going to look for not only a safe haven, but for growth that can offset their losses, and a hedge vs inflation. So what will they buy now?
Your kidding right?
There is simply not a lot of VALUE in the stock market regardless of what you may hear. Simply you are paying a premium for growth like NVDA with a 55PE or Amazon at 219.
Sure you will see a rise in gold prices, but the world economy is still growing, and it is already trading at the top of its range. Now gold is an inflationary hedge, but many already own gold , so how much more can flow into this market?
I think money will start flowing into the crypto market especially after the Senate Hearing this past Tuesday. Money managers are looking for growth right now and with a 400 billion dollar market cap, and the future being bright for blockchain, there is plenty of room for growth here. Retail investors that are pulling their money out of the market as a whole, are concerned about inflation which reduces their purchasing power.To settle the markets, would be a boost for deflationary currencies such as Bitcoin’. Who wants fiat deterioration?
Bottom Line: As the dust starts to settle the best opportunity for growth is in the crypto space right now. Your buying off the highs, near the lows, in a young market that has the potential to be a disruptor. Is this a risky market? Sure it is, but so is the derivatives market as we have seen this week.
This article was first publish on: tradingviews
Image credit: huffingtonpost
Israel Martins is a cryptocurrency researcher and trader since 2016, passionate about blockchain and other emerging technologies.