What will happen in the event of an economic recession in the United States? Analysts are fearing for the worst as they see the U.S. dollar plummet. What will this mean for the equity market, crypto market and gold in particular? Today, we take a look at what industry leaders are saying may happen to the world economy in 2019.
What is likely to happen to the equity market in 2019?
YouTuber Bitcoin Fund Manager says it is no secret that stock markets have peaked. He recently posted a vlog titled “Urgent Bitcoin Update: Skyrocket Fed Interest Rate Hike vs USD vs Gold vs Bitcoin.” In the video he talks about how the stock market has been bullish over the past 10 years and how majority of Wall Street traders agree, a downtrend is in sight.
Usually money from equities would find its way back into the U.S. Dollar which made the currency stronger. A portion also went into gold and other commodities. However, this time it will not be the case. The YouTuber predicts that all the money from equities will this time go into Bitcoin and other cryptocurrencies in the near future.
Are Bitcoin and cryptocurrencies too risky?
According to Bitcoin Fund Manager, in the event that stocks take a dive, investors and institutions will be looking for an alternative investment opportunity that has already hit the bottom and is ready to go up. It is no secret that for the past decade, Wall Street has been making millions of dollars with the S&P 500 etc. Bitcoin Fund Manager says it is a myth that in times of market volatility, people won’t buy into cryptocurrencies that may be more volatile. He dismisses this theory by stating this is what people say only because they have read it.
He questions the risk factor of Bitcoin and other cryptocurrencies. By definition, risk refers to the likelihood of something losing value. But at the current moment Bitcoin is at its bottom and there is thus no risk that it will go even lower. For this reason, Bitcoin Fund Manager says money from equities will be going into Bitcoin when the market crashes.
News from the U.S.
In recent news, the U.S. Federal Reserve announced that they would be hiking interest rates. Click here to read the article.
President Donald Trump on the other hand, is busy with trade wars against China. Read article here.
All of this has an impact on stocks, cryptocurrencies and the economy overall. Bitcoin Fund Manager says in his video that should the interest rates increase, people may not want to borrow money and no one will buy anything. This means that stocks will decline since companies cannot show profits. Slowly but surely, people will start selling stocks and the economy may collapse.
Usually, the dollar would rise when stocks go down. So why would it be different this time? Bitcoin Fund Manager says this is due to Trump waging war against China and is worried about the dollar.
What about gold?
It is a fact that gold is inverse correlated to the stock market and dollar. During 2011/2012 gold made a parabolic rise since the volume of gold that was being used in technology increased. Since then, gold has declined. This may be due to global PC sales going down. Gold is used in PC main boards. Bitcoin Fund Manager says gold may be a bull trap.
What does the future hold?
According to Bitcoin Fund Manager’s video, should the money from equities go into Bitcoin, the growth will be exponential. He urges people to get into Bitcoin as soon as possible. In the event of a recession, people will turn to Bitcoin.
*Please note that this is not necessarily the view of Bitmart and should not be taken as financial advice.