The past week saw some massive losses in the traditional stock markets. As anyone keeping an eye on the financial markets will know, growing coronavirus fears set off a massive sell-off. Now, stocks “are starting to look like crypto”, according to one influential crypto profile.
Stock market tumbles on coronavirus concerns
Previously this week, Toshi Times wrote about how the price of gold was plunging. This was comparable to the losses seen by Bitcoin during the past week.
However, the stock market is taking the brunt of this sudden market reversal. In fact, the past five days saw the stock market fall by roughly $3.2 trillion.
After previously reaching new historic highs, the stock market has now had its biggest weekly decline since the recession of 2008. Bitcoin, which is often said to be a type of “digital gold”, is weathering this market downturn relatively well.
Even so, however, the crypto markets have also seen large losses during the last week. At the time of writing, the price of Bitcoin is holding fairly well around the $8,600 line. Bitcoin, and crypto in general, often faces criticism for being a relatively volatile asset class.
“Stock are starting to look like crypto”
Nevertheless, the traditional stock market is now exhibiting volatility comparable to that sometimes seen in the cryptocurrency markets. As such, the well-known crypto supporter Tom Lee, comes with a tongue-in-cheek observation.
Specifically, Lee responds to a recent tweet by a researcher who discusses the S&P 500’s recent fall. Moreover, this dramatic market fall essentially eliminates the market gains seen over the past five months in just days. Lee had another way to put it:
“Stocks are starting to look like crypto charts. Maybe the whales are playing a different game.”
Furthermore, Lee argues that current investor sentiment over the coronavirus is an overreaction. This is mainly due to the fact that no one known since for sure when the pandemic will reach its peak.
“Because of the idiosyncratic nature of a potential pandemic, it is really difficult to know when it is priced in.”
In addition to this, Lee also believes that the stock market fall could soon reverse. “This market is not normal but it also doesn’t mean we keep falling,” Lee notes. Instead, Lee argues that the stock market will bottom out. Following this, it will launch a “V-shaped reversal” that creates a sharp rally.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.