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Comment by drcongo | Hacker News Reader

As someone who has very little grasp of global markets, I'd kind of assumed that bitcoin and other cryptos would rally if stock markets were falling under a global pandemic, but the cryptos seem to be tanking along with them. Is this down to reduced consumer confidence?

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Yours was a widespread conviction born of the idea that bitcoin and other crypto-assets would be seen as de-correlated safe-havens for funds drawn from volatile traditional equity markets.

The simultaneous drop in value is the very textbook definition of correlation, and therefore suggests that the same decision processes (perhaps even the same decision-makers) are operating in both types of markets and that, consequentially, bitcoin and crypto-assets are factually not alternatives at all.

Even more interesting is Bitcoin has been a leading indicator for tech stocks for some time now. Bitcoin drops often led FANG drops by a few days.

One of the prevailing ideas in several theories of financial market agent behaviour is that crashes occur when all or at least most participants’ horizons synchronise, leading to everybody acting on the same information uniformly. This is likely what is occurring: probably most investors are focussing on the here-and-now and thus on stopping their losses and/or reducing their exposure to risk.

Makes sense. Good thought

Excellent reply, thank you.

The initial 2008 sell-off just like now also affected Gold negatively, although much less than Bitcoin now. I think BTC could be seen in a few years as a hedge against the USD.

More like a "the world is crash and burning I want real cash in my pocket, NOW!" kinda thing. It's hard to buy toilet paper and water with Bitcoin at your local Costco.

Costco sounds as bad as a flight

It's hard to buy toilet paper at all!

Buy a $60 bidet attachment, you savages!

My theory is that BTC is a “high risk” position/part of someone’s portfolio. So people are seeing lots of cheap stocks (high risk), noticing an opportunity and moving out of BTC to buy stocks. Just a theory.

There's no one left in the world to get sucked into that scam, they all got obliterated in that last run to $21k

I mean, billions in trading volume says otherwise.

Machines. Just like on the market.

I still assume it is possible and likely that something like cryptocurrency will eventually become incredibly valuable, but I see that happening only when technical and social hurdles are overcome to make it as widespread and scalable as the current credit card system for everyday transactions.

Unfortunately for current cryptocurrencies, they just don't have what it takes to compete with decades of trust to get everyone to put their daily spending money in them, that is what will make a future system valuable. The current role they play as a speculative investment seems quite silly to me, literally they only thing they are good for is transactions, if you can't do that effectively I don't see value in the tokens at all.

Imagine if someone started a stock exchange and listed a single stock, their own, the stock for the exchange itself, and no one else's. While you can buy some things with bitcoin or ethereum, it's nowhere near widespread, so that really seems to be effectively what it functions as for now, which looks very bizarre on its face. Unfortunately for the people who do want to get rich, if there is an eventual winner in crypto, their rise will probably look something like what we see now, limited buy in from speculators followed by some inflection point, so it's entirely possible buying this dip of ethereum or some other coin might be the right thing, but I'm just not sure any of them are ready yet. Even with SegWit and other stuff happening in bitcoin, it just isn't clear to me that becoming a cash or credit card replacement system is even the goal anymore, which seems like they are just riding on their first mover advantage to prop up the value more than anything at this point.

Couple of possibilities:

1. People who buy bitcoin also are in wallstreetbets selling options they don't understand.

When they get a margin call and have to cover the money they lost, they sell bitcoin.

2. people in bitcoin are selling to transfer into stocks

More like reduced investor confidence, but they are correlated. Essentially, everyone wants a safe place to put their money right now. That usually means bonds (especially government bonds) and cold hard cash.

Most people think of bitcoin as an investment, and a risky one at that. So they are taking their money out and putting it in safer places

In a bull market, every explanation seems right. In a bear market every explanation turned out wrong.

> I'd kind of assumed that bitcoin and other cryptos would rally if stock markets were falling under a global pandemic,

Cryptocurrency has been used as a speculative investment.

It's riskier than stocks, so it has fallen further.

My assumption is a lot of them moved their money to purchase options on the stock market or to cover their butts when one of those options went south.

Not that I know anything about charts, but it did look like a head/shoulder chart as well a while back that would have suggested a dip was coming anyways.

If they were competing markets and the demand transferred sure that would make sense to see that dynamic. But it is common cause in this case and it doesn't privledge Cryptocurrency as it is a delivery and demand issue.

bitcoin has been dropping...

https://www.bitcoin.de/de

The high at 12:00 am today was 7k now it's down to 5700 euro.

People are selling at 5500

"and other cryptos"

"but the cryptos"

Please say cryptocurrencies.

http://www.cryptoisnotcryptocurrency.com/

usage defines language not the other way around

Like it or not, "crypto" now means cryptocurrency, and "cryptography" means cryptography

Linguistically they can both define it as they please really. Just like how a joint can be anatomical, a place, or a drug delivery mechanism.

Really it is surprising that there isn't more contention over abbreviations.

    Usage defines language not the other way around

That depends on whether you take a prescriptive or descriptive approach.

And the prescriptivist approach is dumb, because no one has the authority to prescribe English usage. We don’t have an Academie française, and even English dictionaries explicitly disavow any intent to mandate correct usage and state that they are only cataloging real world speech.

It's also context-sensitive. If you are talking about investing and mention crypto, it's pretty obviously implying cryptocurrencies.

I literally died reading this

> usage defines language not the other way around

I say we start referring to cryptocurrencies as "cyber cash" and then abbreviate it to "cyber". If anyone should suffer from appropriated terminology at the hands of blockchainiacs, it ought to be the insufferable sales staff at security industry conferences.

But "cyber" already means cybersex? I mean, that's what I think of when I hear Cyber Monday, Cyber Security, etc.

"usage defines language"

Yeah that's exactly why GP is asking to change the usage.

Why? "cryptos" only refers to cryptocurrencies since nobody says cryptographies.

There are a lot of communities, from Reddit's /r/crypto to Freenode's ##crypto channel, which use the "crypto" shorthand for "cryptography" have been around for decades and in the past couple of years have been inundated with cryptocurrency obsession.

TL;DR - The main goal is: "Get off our lawn."

Yeah, I get that. But I mean the plural version should be exclusive to cryptocurrencies since I've never seen the plural form of cryptography in use. It seems it's fairly unambiguous in that "cryptos" as a plural term has never been used to refer to cryptography(ies).

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