- There is plenty of evidence that the stock market is near the peak of a bubble, and this speculation could be fueling crypto investment
The stock market has experienced a nearly continuous rally over the last decade, with stock indices in the United States persistently achieving record highs in recent months. However, speculation is growing that this is a bubble and will soon come to an end, and this speculation could be fueling investment into crypto.
Essentially, the economy was already looking shaky over the past year, with continual Central Bank interest rate cuts and the injection of hundreds of billions USD of stimulus being required to prevent liquidity from drying up in the stock market. Since the beginning of 2020 the economy has weakened even more due to the Coronavirus pandemic, since the outbreak and quarantines in China have brought the Chinese economy to a screeching halt.
At this point China and other nations are injecting upwards of one trillion USD just to make up for the economic loss from the virus, and these injections seem to be the only thing holding the economy afloat.
Bitcoin is considered a safe haven asset, since it is independent of the stock market, and it appears more investors are choosing to buy Bitcoin in order to keep their money safe from a potential stock collapse. Indeed, this could partially explain why Bitcoin’s price has increased from USD 7,000 to USD 10,000 since the beginning of the year.
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