We are all market participants in one way or another. Many of us are participants in the job market, health services market, food market, housing market, and stock market (401k plans or direct investing). The stability of markets determines our day to day livelihoods. Markets strongly affect the forces of supply and demand. Whenever there is a under supply or overwhelming demand for a product, say oranges, then their value (reflected in price) bids higher. Conversely, if there is an over supply of these oranges or little demand for them in the market, the price would bid lower. In result, the market activity naturally determines the price based of supply and demand. This basic economics principle doesn't get most's blood flowing, but, they should because market instability is a direct threat to our very lives. How can markets become unstable? Crisis' and events of uncertainty.
We can look no further than the affect that the U.S. Iran conflict caused on financial markets such as: the stock market, commodities market, bond market, and cryptocurrency market. However, there is also an ongoing threat to not only to financial markets but many others, as one market can affect the other. This threat is the Coronavirus pandemic that claims over 1,000 lives in China, and counting. Cases have popped up in several countries with their markets being shaken. The uncertainty in China's economic output can likely affect other countries that rely on China for its cheap exports. Also, with potential Coronavirus cases appearing in the U.S. in recent days, the Federal Reserve Chair, Jerome Powell, expresses caveats the virus' possibility to affect U.S. economic growth. This is a huge signal for us to pay close attention to, for the fragility of the U.S. economy rests on a outbreak in the U.S. Subsequently, markets can become tremendously volatile for participants and investors of those markets.
Like the Iran conflict which precedes it, the Coronavirus seems to spark a motion for investors to run to safe haven assets that are not directly connected to other markets, which could be susceptible to downside risk from the market uncertainty. Thus we see Bitcoin, now priced at $10,066, show positive response to this environment. This comes to no surprise as Bitcoin continues to solidify its position as an uncorrelated asset from the financial markets. Keep a close watch to how this decentralized asset continues to respond to, not only market uncertainty, but government fiscal and monetary policy as well.
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Dewon Trades
I wonder how long it will hold about 10K.
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