Goldman Sachs Stock Market Indicator Goes ‘Flashing Red’ to Predict a Collapse as Bitcoin Speculators Look for a Boost
Two matters are currently top of the discussions within the cryptocurrency community; the upcoming Bitcoin Cash hard fork and the SEC’s impending decisions on Bitcoin ETFs. The approval of Bitcoin ETFs is expected to cause a massive influx of institutional investors into the crypto market.
According to a post on Bloomberg, the reluctance of large companies to delve into the crypto space results from a lack of concern. However, this could change soon – the stock market is getting more unpredictable by the day, whereas the price of Bitcoin is stabilizing. If this trend persists, institutional investors could turn into the more stable crypto investments.
Earlier this week, Goldman Sachs run their bear market prediction tool and the results were far from encouraging. In fact, the market has never undergone a regression as intense as the current one over the past fifty years. Moreover, the tool indicated that investors who persist with their stock investments are at the risk of incurring substantial losses.
More specifically, CNBC revealed that the Goldman Sachs tool considers several parameters before arriving at a final value. These include the rate of unemployment and inflation, among many others. As mentioned earlier, the 73% result is the worst-ever return since the 1960s. A testament to this appalling performance is the recent plummeting of the Dow stock exchange.
In addition, Peter Oppenheimer, the principal equity strategist at Goldman Sachs, said that the results indicate that the future of the stock market is bleak. A similar opinion was expressed by JP Morgan, as they predicted that the US stock market has a high probability of undergoing recession within the next two years. Peter backed his stance by mentioning that previous instances where the indicator has gone above 60% have always been followed by bear markets.
The collapsing of the stock market does not translate to the flourishing of the crypto markets. Regardless, the recession is likely to spur a massive migration to crypto investments. Institutional investors are expected to be on the forefront of this transition.
Lastly, Bitcoin and other digital currencies are inherently immune to inflation. This is the reason why cryptocurrencies have gained more users despite the bearish trends throughout 2018.