A 20% loss may be understandable, even trivial in the world of volatile crypto coins, but when it comes to the stock market, with its limitations and conservative practices, it is a notable event. The Facebook (NASDAQ:FB) stock price plunged more than 20% in a single day after a disappointing earnings call showed weaker results and predicted further losses from demands on security and confidentiality.
On Thursday, Facebook wiped out $120 billion of its market value, and the stock crashed from $217 to $174, erasing most of the gains it made in the past few months. The rapid price crash invited comparisons to the behavior of crypto assets.
https://twitter.com/CRYPTOVERLOAD/status/1022250878122831872
This time, however, the crash of Facebook was followed by a slide in Bitcoin (BTC) prices, once again below the $8,000 level. Interest in Bitcoin may be partially fueled by the long bear market, and the expectations of assets having the power to continue appreciating. However, a serious crash causes fear of deflation of asset prices.
https://twitter.com/iamjosephyoung/status/1022601126036746240
Selling and consolidation dragged BTC prices down from recent highs above $8,400 to below $7,840 on Friday. However, the downturn is still within the bounds of a usual correction, and may see BTC return to its rising trend.
Others reacted to the Facebook loss, recalling it almost matched the entire market value of Bitcoin. At the moment, BTC’s market value has slid to $135 billion, still a significant size matching several large companies. However, BTC trading happens on a very low “free float” of coins compared to stock market trading, and the price may be swayed more easily.
https://twitter.com/Ragnarly/status/1021928324971413504
In the long run, the biggest proponents of Bitcoin see it as a tool for wealth transfer, when the digital currency is preferred to traditional assets. So far, no real connection has been discovered between the behavior of Bitcoin and traditional assets, except that the generally increased liquidity in the past decade has lifted many assets.
Bitcoin also still expects the inflow of institutional money, especially through the ETF proposed by CBOE. In the latest attempt to pass their own Bitcoin ETF, the Winklevoss brothers, founders of the Gemini exchange, received another refusal.
For others, the giant loss of Facebook is a positive sign, showing that the cryptocurrency market is in fact quite small:
https://twitter.com/Cgj_Crypto/status/1022243903179636736
Presumably, the crypto market could grow larger, in case it was seen as a legitimate option for investments, on par with the stock market.
This article appeared first on Cryptovest
