Cryptocurrency
Impact of Stock Market Decline on Cryptocurrencies
Friday. July 19 at 6:30 AM
1 min. readThe S&P 500 index recently dropped by 2.6% over two days, hitting the 5,523 level on July 18. This decline, which wiped out gains from the previous weeks, was followed by increased buying activity after Taiwan Semiconductor Manufacturing Company (TSM) reported better-than-expected earnings. The negative investor sentiment from the stock market correction also affected Bitcoin (BTC) and Ether (ETH) prices on the same day. Understanding the reasons behind the stock market's fall is crucial to assess the potential impact on cryptocurrencies. Concerns about inflation due to mounting government debt could lead investors to seek alternative assets like cryptocurrencies. Additionally, weak job market data and challenges in the commercial real estate sector are contributing to the overall economic uncertainty. Tech stocks, including those related to AI, also faced setbacks due to potential export control regulations. Experts warn of a possible AI investment bubble, urging caution in tech stock investments. These market dynamics have influenced the performance of major tech companies and spread pessimism to other markets, including cryptocurrencies.