Hello Dario,Â
Lately the crypto market has been soaring, not to mention the stock market itself as you have already described. But I've been wondering about two specific questions.
1. In 2008, there was no cryptocurrencies market, as we know it today. Will the crypto market follow the path of the stock market during a stock market crash? Or some cryptos, seen as more stable assets, will see an influx of liquidity coming from whoever doesn't trust stocks anymore?
2. I didn't find an article where you talked about the following. What would be the potential temporal outlook of the following crash? Do you envision a day/week that will be acutely catastrophic or you rather see it as a phenomenon that will span many months?
Thank you very much for your answer.
Best,Â
Â
Francesco
Hi Francesco
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With regard to your first question please note that in a generalized crash characterized by widespread panic selling there won't be any asset class immune to that including crypto. In that situation, only T-Bills are a real "safe harbor".Â
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If the correction in other asset classes, especially stocks, is instead more orderly liquidity will definitely continue to slosh around in the system and I expect crypto to potentially be beneficial of that as I shared before.
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You might find this article interesting to you: https://justdario.com/2024/09/the-forgotten-lesson-from-every-crash-since-1929-be-a-buyer-when-there-is-no-hope-left-in-markets/
