Cryptocurrencies took a tumble earlier today, while stocks managed to rally.
All of the top 10 currencies were down at least 7% at the time of report, according to CoinMarketCap.
The major stock indices had recovered, however, with the S&P 500 index up close to 1.5% at the time of report and the Dow Jones Industrial Average 1.9 higher, Google Finance data shows.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Trade War Concerns
These price fluctuations took place as reports circulated that U.S. and Chinese officials were working together to prevent a trade war from happening, according to MarketWatch.
“The drop this morning (N. America time), along with the rise in US equity markets at the same time, would appear to be directly related to the trade talks announced between China and the US to avoid a trade war,” said Tim Enneking, managing director of Crypto Asset Management.
“There’s rarely such a direct relationship (or, perhaps, such a strong correlation) between macroeconomic events and crypto prices,” he emphasized.
While stocks and cryptocurrencies appeared to move in opposite directions earlier today, not everyone agreed with why these separate asset classes behaved the way they did.
“I don’t see any relationship between crypto prices and this potential trade war,” said Jeff Koyen, CEO of 360 Blockchain USA.
“I believe we’re in a G20 hangover,” he stated.
Koyen elaborated on his statements, saying that a”The G20 could’ve gone much worse, but the takeaway was a call for very reasonable, gradual regulations.”
However, “even the bulls don’t know when we’ll see $10,000 again, so we’re seeing a sell-off,” he stated.
“It’s either holders taking profit or it’s new traders mitigating their losses.”
Mati Greenspan, senior market analyst for social trading platform eToro, also provided some insight in to why cryptocurrencies have suffered headwinds lately.
He described these losses as probably being “a continuation of the recent downtrend that began in early January,” when the total market value of these digital assets hit an all-time high and then began declining.
Greenspan emphasized that recent losses are probably just a continuation of this trend because “There hasn’t been any major market moving news affecting crypto in the last few days.”
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