As the crypto markets are shaken to the ground by this month’s huge selling, investors are heavily eyeing the traditional markets. Bitcoin has recorded its lowest price in 14 months, but the traditional markets aren’t welcoming investors back with open arms either. The Dow Jones Industrial Average, S&P 500 and Nasdaq have erased the large gains from earlier this year. Right before the Black Friday weekend, the selling trend seems to be in effect for all markets. It’s the same with FAANG.
FAANG stocks have been in the spotlight of the sell-off. FAANG stands for the most popular technology stocks: Facebook, Amazon, Apple, Netflix and Google. The term was pinned down by Jim Cramer and it didn’t include Apple at first, spelling FANG. All of these technology giants are in bear territory from more than a month now. For 52 weeks, their stocks have descended more than 20%. Put together, FAANG stocks have lost the ridiculous amount of more than $1 trillion from their yearly heights. This is a remarkable shift since Q3 started.
FAANG is down one trillion dollars
Mega corporations are not the only ones which have suffered large losses. Nvidia and AMD are also seeing only red as the reduced demand from crypto miners is really taking its toll. Even fewer miners are now interested in acquiring GPUs to mine ASIC-resistant cryptocurrencies like Monero (XMR).
The biggest hit however, was suffered by cryptocurrencies. The huge sell-off managed to sink the crypto market cap below $150 billion. The price of Bitcoin additionally sank below $4000 – the lowest recorded mark since the beginning of October 2017. Many experts believe that there is a correlation between the crypto and tech retracements.
The senior market analyst from eToro, Mati Greenspan explained that the market’s recent movements find their root in the 2008 financial crisis. He believes the main culprit are central banks, which began injecting incredible amounts of capital into the economy in a desperate attempt to keep the financial system going.
He stated that a lot of the money has now found its way into many different markets. Usually with little research from the investor’s side. With the high amount of returns in 2017, it’s normal that we’re seeing a retracement of that in 2018. This development will quickly snap short-term speculators back into reality as many of them realized that a dollar today doesn’t mean 5 dollars tomorrow.
Still, all the capital is moving to other markets, it is never lost. All of these selloffs could mean that people need money for the holidays. Another version is that these bear markets are signs for the impending financial colapse, something a lot of economists are predicting. I have a feeling that we will learn in the next two months the direction that all markets are heading.