In a mad dash to cash, traders were dumping virtually all kinds of assets in favour of good hard cash on Monday, which just saw one of the largest one-day market declines ever.
When all the damage was totaled, the Dow Jones Industrial Average dropped by 1,175, or 4.6%. The broader S&P 500 index fell by a slightly more modest 4.1%, while the Nasdaq was off 3.8%. At one point during trading the Dow was down 1,500 points, marking its worst-ever intraday point drop in history.
And over in the virtual world, Bitcoin prices dropped briefly below $7,000, before recovering slightly as of the time of writing to $7,050, still down 14% on the day.
So what gives?
Well, actually, nothing really.
There was no major move or news precipitating the stock market drop. The market had been on a one way ride upward since Donald Trump became President just over a year ago with the move upward accelerating thanks to corporate tax breaks which kicked in late last year. So, the market was naturally expecting a correction or profit-taking period of some sort at some stage. That stage just happened to be today.
Once the selling accelerated, however, good ol’ computer program trading took over, moving the markets even further.
Whether this is indeed a slight correction / profit-taking in a hot bull market, or the beginning of a bear market of some sort, still remains to be seen.
Back in crypto-land, nervous cryptocurrency holders were hit with some more bad news from the real world, when some major banks (JP Morgan Chase, Bank of America, and Citigroup) declared that they will not let customers buy cryptocurrencies with their issued credit cards. More selling followed, and voila, Bitcoin was trading with a 6-handle for a good part of the day.