I came across the piece and thought I'd pass it along. Part of the concern on BTC and Crypto is how the popping of the bubble could impact on the real economy and on markets.
This a bit of a thinking out loud piece on what would happen to the stock market:
Scenario #1: The Bitcoin bubble bursts investor confidence.
- "If there's a collapse in Bitcoin, the direct financial impact won't be overwhelming, but it could set off a lot of fear and very radically alter people's mindset-which in turn could be damaging for stocks
- if cryptocurrencies "really crashed and burned, that could really shake people and be enough to create a real market impact"
Scenario #2: Companies jump on the Bitcoin bandwagon just before a crash.
Scenario #3: A cryptocurrency crash has a Wile E. Coyote effect.
- stocks sometimes "act like a cartoon character who's run off a cliff. Once they realize there's nothing support them, they start to drop."
- In other words, investors are often willing to keep going in one direction, even if it seems risky or irrational, until they're jarred. But when they are scared or shaken enough-for instance, by a financial collapse, like in the global financial panic in 2007-they start looking down at their feet and notice how dangerous their strategy really is.
Here is the link to the article for more: Here's How a Bitcoin Crash Could Bring Down the Entire Stock Market
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And, a quick update on bitcoin:
I noted yesterday:
- Bitcoin had a notable move - a USD2,000-odd bounce. Which is a bit of a change for it from recent days and is likely indicative of some stability present,
Change in behaviour like this is of significance (in my book anyway). So far so good.
