Normally viewed as chaotic gambling, the stock market loosely aligns with the crypto market at the best of times; however, on Monday, when the stock market crashed due to President Trump’s trade wars, bitcoin surged toward the 90K mark. This indicates that investors might shy away from investments during uncertain times. Alongside bitcoin’s rise, $1.5 trillion dollars worth of assets were vanishing from the United States market.
A Story From Two Markets: Crypto Rises to the Occasion as Stocks Sink
Cryptocurrency’s dominance as a decoupled asset class grew stronger on Monday while, simultaneously, for most other markets, it was ‘business as usual.’ The boom of cryptocurrencies wasn’t only marked worthwhile on Monday, but actual market data suggests it continues to be worthwhile. Cryptos witnessed an incredible 1.77 percent expansion; during this, close to $75 billion became part of its total market cap, which almost reached $2.73 trillion by the end of the day.
Bitcoin’s Positive Signals: Approaching a Psychological Mark
During the trading day, Bitcoin (BTC) came close to hitting the $88,527 level. It ultimately closed at $87,262, which is still a respectable 2.61 percent gain. This increasing momentum hints that investors may be turning back to Bitcoin as a safe-haven asset amidst the chaos in equities markets. Analysts are signaling greater bullish action could take place as $90,000 serves as the major psychological level investors look towards.
Altcoins Joining the Party: Larger Market Strength
BTC’s strong performance had some company, as a number of other alternative digital assets recorded considerable returns. Convex Finance Coin (CVX) was the top performer, soaring over 21.04%, while Stacks (STX) climbed almost 13%. Telcoin (TEL) and Reserve Rights (RSR) also had notable returns of 11.57% and 10.07%, respectively. A host of others like FARTCOIN, MANA, CKB, KAS, and POL also registered gains. This underscores the heightened bullish sentiments across the crypto market.
The Gold Market: A Mixed Serving during the Crisis
Gold and cryptocurrencies are frequently labeled safe investments during heightened economic volatility; however, their performance on Monday was different. The gold market blazed with a stellar performance, amassing a 3.28% increase, fortifying a robust monthly advance. Silver managed a much lower 0.57% increase and remained below its month-ago mark. This indicates that the precious metals, while safe in general, respond differently to market stressors.
Trump’s Trade Wars: Heightening Economic Risk
The extreme divergence stemmed from the crypto market and stock market being in stark contrast, set against increasing trade hostilities, spearheaded by President Trump’s policies on financial markets. This is set alongside the jaw-dropping 1.5 trillion dollars that disappeared from US equities overnight, highlighting the fundamental damage placed on more traditional corners of finance by these trade wars.
The Evolving Perception of Cryptocurrency as a Safe Haven Asset
The response from the market to Bitcoin’s price on Monday may indicate a shift in perspective on how investors view cryptocurrencies. As traditional assets increasingly face volatility and uncertainty because of geopolitical and economic factors, crypto. This trend, while not necessarily favorable in the long run, weakens volatility and uncertainty towards Bitcoin, showcasing its maturity as an asset.
