Yesterday we had one of the biggest sell-offs in stock market history. The Dow Jones dropped almost 7%. And the S&P 500 dropped nearly 6%. The sell-off was extremely steep.
At one point on Thursday, Bitcoin was also down around 6%. But it has rebounded since and is trading at $9,496 as I write this.
Stocks have also rebounded today (so far). As of 2:30 p.m today, the S&P 500 is up about 3%.
I continue to believe that the primary short-term risk to bitcoin and altcoins is another major stock market sell-off. When people think they might be seeing the top of the bull market, they often panic and sell everything.
If we go into “liquidation mode” like we experienced in March — and briefly yesterday — crypto prices could drop in the near-term.
Long-Term Bull Case Stronger than Ever
Over the long-term, the bullish case for bitcoin and crypto has never been stronger. Every investor in the world is starting to realize that “money printing” is very real. And that it’s going to be a big part of our economy for the foreseeable future.
Modern Monetary Theory (MMT) has arrived — and we’re witnessing its beginning. The Federal Reserve is printing gobs of money and directly funding government expenditures. I suspect that we will soon see Universal Basic Income start in many countries soon — possibly even here in the U.S.
I seriously doubt taxes will be raised. There’s almost no chance that government spending will be cut. So all the money to pay for these programs will have to be printed. Eventually it will negatively affect fiat currencies. And I believe people will increasingly turn to bitcoin and other cryptocurrencies as alternative stores of value.