President Trump appears to be trying to further boost the stock market through an enthusiastic tweet he posted today. Let’s not forget that the price of Bitcoin also tends to follow the stock market boom.
Bitcoin has a longstanding relationship with the stock market. In fact, the S&P500 rallies were closely correlated with Bitcoin’s own rallies.
The opinion may be unpopular, but it is true nonetheless. As Fundstrat’s Tom Lee has repeatedly said on CNBC and elsewhere, when stocks go up, Bitcoin rises too. “Once stocks hit an all-time high, Bitcoin will become a risky asset,” he said in September. In fact, the stock market will have to continue trending higher if Bitcoin is to crack its all-time high of $ 20,000. It’s just too young to survive a financial collapse, but the jury still disagrees.
However, it appears that momentum is building for stocks to go higher, albeit for the wrong reasons. President Trump tweeted about the stock market today like he’s writing for an upswing rally. He clearly wants to keep pumping the market.
Stock market at all-time high! HOW’S YOUR 401K DOING? 70%, 80%, 90% more? Only 50% more! What are you doing wrong
– Donald J. Trump (@realDonaldTrump) January 9, 2020
It’s obvious that President Trump is thrilled to see the stock market breaking records, but we’ve never seen a president cheer him on like this before. Trump is actually trying to boost the market, which has led some to wonder if we are in the middle of a bubble.
As one Twitter user and obvious Bitcoin enthusiast Hernz (@hernzzzzzz) says, we are in the euphoric phase.
– Hernz (@hernzzzzzz) January 9, 2020
Still, there’s no denying that a strong stock market is good news for Bitcoin. So in the short term, the diagnosis looks strong. The long-term outlook for the stock market, however, looks uncertain – and Trump’s cheer certainly doesn’t give investors much confidence.
With 2020 looking to be a strong year for the markets – and possibly Bitcoin as well – the inevitable future recession could be put on hold for another year. On the other hand, Black Swan events are unpredictable, so we should be careful.
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