What happens with crypto if the stock market crashes?

Everybody wants to know what happens with crypto in the future. Cryptocurrencies have not been around long enough for us to develop an idea of what their historical correlation to equities might be. But I am pretty sure the answer to this question is " A LOT!" and here’s why:

So when the stock market crashes, it will destroy the liquidity, trust, and confidence of the investors in the market.

You need all of them in high supply for a rise of cryptocurrencies. As the market crashes, liquidity is literally destroyed and vanishes into the ether, and individuals and institutions are often forced to liquidate multiple assets in order to meet various obligations, including margin calls and investor fund withdrawals. As a result, the forced liquidations in any asset class would likely have a negative impact on cryptocurrencies, as they would need to be sold to make up any shortfalls.

I also think trust and confidence are even bigger factors. Cryptocurrencies are new to everyone. So it’s unlikely that old school investors would seek out to crypto as any kind of safe place in a broad market crash. You can go even further and say, the first thing that gets sold when confidence evaporates are speculative assets. Since cryptocurrencies are still considered highly speculative, everybody will most likely sell them first.

So crypto had a difficult year so far. I don t think it will stop dropping in the near future. When the stock market crash will happen, I think it will even be worse.

BUT.... I am pretty sure Blockchain and Cryptocurrencies will rise again. So be patient and wait till the market crash happened and invest afterward with confidence.

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