By Andrew Keene
This post Dow 12,000, Then Bitcoin $30,000 appeared first on Daily Reckoning.
We all know the stock market’s been on a wild ride lately.
You may find this shocking, but I believe the Dow could drop to 12,000. And, as a consequence, bitcoin could rally to $30,000.
You read that right. How?
The writing is on the proverbial wall and the panic is setting in on Wall Street. And in markets around the world, for that matter. Don’t think for a minute that the one- or two-day rallies we’re seeing are a sign of things to come for the stock markets…
Because they aren’t.
The long-awaited market correction is here, and no matter how steep our new growth rate may be, or how low the unemployment rate number is…
Neither of these factors can stop the correction that’s coming because they had nothing to do with the gains we’ve all enjoyed since this longest of bull markets began back in 2009.
That was when the Federal Reserve began pumping trillions of dollars into the economy year after year after year, while keeping interest rates at record lows. Money has been cheap and plentiful for almost a decade.
But the days of Fed “bubble money” are behind us.
Not only is the Fed winding down its bond purchases, which has supported the bond market all these years, but three quarter-point interest rate hikes are on the 2018 calendar.
The first one likely to be announced at the March 20-21 Fed meeting. The markets will get hammered and undercut from both Fed policies.
And that leads me to my main point…
The next crash — which I believe will be here soon — will create demand for a new safe place for investors to put their money.
I believe that place will be cryptocurrency. Specifically, bitcoin.
But you’re probably wondering…
“How is bitcoin a safe place when it lost half its value since the end of last year?”
Sure, bitcoin saw a big run-up and then fell even further than the markets. But there was a huge difference between bitcoin’s surging prices and the Dow’s.
Bitcoin skyrocketed in value in 2017 because of its undeniably transformative impact on our world. You can’t say that about stock prices that for almost a decade have been inflated by phony Fed money and manipulated by derivatives trading.
The crypto “crash” on the other hand was a case of fear, not inflated value. The reality is that cryptocurrencies are full of real value that’s supported with deep investments by the biggest names in technology and banking. And they carry no debt.
Investors will flock to bitcoin in the next crisis, especially if sensible regulation legitimizes crypto in the minds of investors..
And that brings me to my next point:
There’s no correlation between stocks and cryptos.
Cryptocurrencies will impact the dynamics of any potential correction. That’s because cryptocurrency markets will give investors a new asset alternative where they can reposition their money.
Aside from the technological revolution that they’re driving, cryptocurrencies will seriously disrupt the relationship between the stock and bond markets as we know them.
That’s …read more
Source:: Daily Reckoning feed
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