Unemployment in the United States has reached new heights, as the economic crisis caused by the coronavirus pandemic continuesânot that Bitcoin or stock markets are showing it.
Crypto market cap surged by $13 billion over the past 24 hours after Bitcoin briefly struck $10,000 per coin yesterday as the anticipation of next Tuesdayâs halving grows. (The Bitcoin halving is a once-in-four-years event that halves mining rewards on Bitcoinâs blockchain, reducing supply and keeping inflation in check.)
Bitcoin hitting five figures had not happened since mid-February. Other major crypto assets, such as Ethereum and Rippleâs XRP, have experienced marginal gains of less than 1%. All in all, total market cap for all cryptocurrencies now exceeds $268 billion.
Meanwhile, the Dow Jones Industrial Average (DJIA) closed today trading 400 points higher than the day before. In a recent newsletter, Mati Greenspanâfounder of Quantum Economicsâsaid Bitcoin and stocks have âbeen at their highest correlation on record for the last two months.â Todayâs bullish figures suggest the âdecouplingâ of crypto from the stock market hasnât happened just yet.
What is decoupled, according to Greenspan, is the relationship between the US economy and the stock market. And, by extension, the same would apply to the crypto market as well.
Despite positive swings in both markets, unemployment in America has surged to a âdepression-eraâ level past 14%. The Labor Department estimates that as many as 20.5 million jobs disappeared last month. The good news is that roughly 75% percent of those job losses are considered âtemporaryâ due to current COVID-19 conditions.
This could be why markets arenât reacting to the unemployment numbers. Analysts also point out that despite the poor job figures, many of the jobs lost in April were in specific industries, such as travel and hospitality. In addition, several statesâsuch as California and Floridaâsaw various stores and âlow-risk retailersâ open today in attempts to gradually alleviate protective measures against the coronavirus.
Meanwhile, Apple said today that it's planning to begin reopening stores next week in states like Idaho and Alaska. Disney World is also looking to reopen in stages starting later this month.
Maybe that optimism that the worst is now behind us is âpriced in.â
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.