The global asset markets suffered a broad sell-off today. Interestingly enough, cryptocurrency prices declined along with those of stocks and commodities. Will this price correlation continue?
Cryptocurrencies suffered widespread losses today, falling in value as other assets like stocks and commodities followed suit. Bitcoin fell to $42,527.50, the least since August 7, CoinDesk figures show. Other digital currencies also declined, as ether and Cardano’s ada were both down more than 10% over the last 24 hours at the time of this writing, additional CoinDesk data reveals. Major stock indices were also in the red, with the S&P 500 index and the Dow Jones Industrial Average finishing the day 1.7% and 1.78% lower, respectively, according to Google Finance. The S&P GSCI index, a widely used benchmark for commodity prices, closed down 1.7%, additional Google Finance data shows. [Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.] While explanations for what caused the widespread sell-off varied, one factor that was mentioned repeatedly was concerns that The Evergrande Group, a major Chinese real estate company, could default on its debts, which could in turn weaken the world’s second-largest economy. There is also uncertainty surrounding the Federal Reserve, and when it will begin tapering its current monetary stimulus. The central bank will begin a two-day meeting tomorrow, and many investors will be watching to get a better sense of this financial institution’s future policy moves.
