The economic forecast points to the major economic storm which can only be compared to the Great Depression. Stock market crash explained by BTCMEX.
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The US stock market has been tanking for the last two weeks. The Dow Jones industrial average is currently in a volatile rollercoaster ride. The market movements reached the 4.5% movement range. Both financial experts and investors are trying to predict what’ll happen next.
There is a fear of a further market crash with the warning signs of Federal Reserve last week’s rates cut, which almost created debt in the market. The futures market also continues its downtrend. Even the most bullish stock market traders are losing faith. They start believing that the economy is facing a meltdown and none of the catalyst would be able to push the market in the long term.
The stock market crash has already begun! This kind of movement was last seen during the Great Depression. There were only 65 occasions in history when Dow recorded the daily loss that exceeds three standard deviations over the average daily return. The market is reported to be “much worse than in 2008”. Read more about the last economic recession on BTCMEX.
The closest comparison to the current market behavior was in 1933 when the US abandoned the gold standard in the middle of the Great Depression. Even when the Depression ended the stock market was in a free fall. Back then the dollar was devalued against gold. According to the analysts, this is what recovered the market after the Great Depression. It’s predicted that the Fed is planning to take similar actions to rehabilitate the current stocks. With the US already having extremely high debt levels Federal reserve is trying to pump the market by dollar injections and rates cuts. Economists predict massive levels of deflation under these circumstances. This obviously will lead to an increase in consumer goods prices. Everything is also pointing to the global economic meltdown as the US dollar is gradually losing its dominant position as the global currency.
The world is currently in search of the new international value standard and the new investment safe haven. Read further about the role of the blockchain industry and the place of Bitcoin during the coronavirus outbreak on BTCMEX.
Please note, that the article is a part of BTCMEX Blog, the views and opinions expressed here are the contributing author’s only, and do not necessarily represent the views of the company.
Julia Bulakh for BTCMEX