FAANG Tech Stocks Record Losses More than the Cryptocurrency Market Since All Time Highs
Top technological stocks have lost more than $1 trillion dollars in market capitalization since their all-time high. This is certainly more than what the crypto market lost since it reached almost $900 billion dollars back at the beginning of the year.
We are talking about the FAANG companies, Facebook, Amazon, Apple, Netflix and Google, which are also in a bear market right now. For example, Apple informed that it is expecting a weaker demand for the latest iPhone XR model. Furthermore, Facebook lost around 40% of its value since the scandal related to fake news on its platform.
Both Amazon and Google have shown disappointing earnings for the fourth quarter which is not good for their value. Netflix followed the trend and has also lost part of its value.
Back in January, virtual currencies reached a market capitalization of $835 billion dollars. Since that moment, the whole market lost more than 83% of its value. This is equivalent to almost $700 billion dollars.
Anthony Pompliano, the founder and partner at Morgan Creek Digital, said that FAANG companies should not be down between 20% to 35% because these companies already have profitable and tested products and services. Instead, most of the virtual currencies are trying to plan for the future, most of the blockchain projects linked to virtual currencies are still developing their products.
That means that virtual assets are less likely to recover in the future, something that FAANG would probably do.
Facebook, Apple, Amazon, Netflix, and Google have lost almost $1 Trillion in value since their 52 week highs.
Translation: 5 public equities lost more investor money in the last 60 days than all 2,000+ cryptos did all year.
— Pomp 🌪 (@APompliano) November 21, 2018
During the last months, the US dollar has shown to be very strong compared to other currencies. The FED has taken the decision to raise interest rates and emerging economies and stocks felt this decision. Bitcoin, which has been considered an asset that is not correlated with the traditional market, has also experienced a very hard drop during the last months.
There were some analyst saying that Bitcoin and cryptocurrencies will behave in a similar way as stocks and other assets if there is a moderate or weak crisis in the world economy. Nevertheless, if there is a debt or currency crisis, Bitcoin could work as an asset to store funds.
Moreover, there are some reasons inside the virtual currency market and space that might have affected the market. The U.S. Securities and Exchange Commission (SEC) has announced enforcement actions against two Initial Coin Offerings (ICOs). Furthermore, the Bitcoin Cash (BCH) community is currently in an ongoing hash war that would definitely have an impact in the future of the virtual currency market.
The stock market is expected to behave in a better way once the dollar comes back to previous levels or if the FED lowers the rates. The crypto market could recover in the near future once Fidelity, Goldman Sachs, and the ICE release their institutional products to the market.