ELI5: Tariffs --> BTC down 5%+ since announcement ES down a few percent as well

Hm, put another way, I am not sure if this dip should be bought or not.

Crypto is crashing.

Tariffs are inflationary and reduce economic productivity. Interest rates will stay higher. Tariffed countries' currencies become less attractive. Stocks down, dollar up

Yeah, so the bearishness in risk assets was:
inflation—> FED hawkishness—> rates up.

Looks like the dip should have been bought if your thesis was Mexico will insta cave. Poly market had the sweet spot for the trade war at a couple of months.

jesus... Crypto isn't crashing.

correction... Tariffs can POSSIBLY be inflationary.

because... USD is the 'standard' for all currencies and has been ever since it was chosen/negotiated/forced to be backed by oil.
flight to safety.

BTC went from $106k to $91K in four days. That’s 14.15% in four days. When I posted that it was accelerating to the down side and went from $101k to $91k in two days. That’s is 10% in two days.

There were tons of all coins down 20-30% in 24 hours.

That’s probably $500B+ in market cap over the weekend.

You wouldn’t characterize this as a crash?

BTC is a volatile asset. Moves of 10% in a few days time should not be unexpected.

IRT alt coins they don't matter anyways so who cares.

So you are suggesting tat since high volatility is to be expected, it shouldn’t be considered a crash?

IDK if I agree with this or not TBH. Say something has an expected move if 50%, like Ripple battling the SEC in court w/ a ruling expected on Friday.

Say they lose and their valuation is cut in half. I’d still call that a crash even though the volatility was expected.

Say something has a 50% expected move every week. And say its valuation is cut in half. Still seems like a crash.

IDK, maybe I’m splitting hairs. Where exactly is the line drawn?

From Wikipedia: A stock market crash is a sudden and dramatic decline in stock prices across a significant portion of the market, resulting in substantial paper wealth loss. Crashes are often triggered by panic selling and underlying economic factors, and often follow economic bubbles and speculation. Crashes are quick and brief, while bear markets are slow and prolonged. The average bear market reduces stock prices by 35.8% from peak to trough and typically lasts about a year and a half.

According to Investopedia: Although there is no specific threshold for stock market crashes, they are generally considered as abrupt double-digit percentage drop in a stock index over the course of a few days.

100% fits what happened to crypto.

Crypto is not a stock index. It is a security traded on the major exchanges.

Is a penny stock going from 0.04 to 0.03 a crash? No.

Is a 1 year treasury note losing 5% of its value in one day a crash? Yes.

"Crash" is a subjective term to describe a sudden, unexpected, substantial drop in value.

Home prices going down 5% in a month may be considered a crash by many people. Bitcoin going down 5% in a month is within expected volatility. In fact BTC not going up or down at least 5% in a month would be considered abnormal behavior.

The SEC is well aware of the volatility of crypto stocks, and special rules for trading are implemented for them (e.g. buying not allowed on funds not "cleared").

You can use the term any way you want, but BTC did not crash today.

You do bring up a valid point about implied volatility increasing for an event, such as earnings. Volatility is priced in the options such that the security "may" fluctuate wildly after earnings are reported. At some point the drop substantially exceeds the expected range. I think that could be fairly called a crash. IRT to bitcoin their options did go up a bit Friday, but nothing crazy.

Off the top of my head a crash might be roughly a 3 sigma event, which happens about once in 300 or so observations.

You could be right about penny stocks. But BTC is no penny stock.

Penny stocks fluctuate wildly bc there are more orders that represent a skewed ratio of stock to flow.

If I want to sell $1M in a penny stock, that may be 10x average volume for the day. If I want to sell $1M of crypto, that wouldn’t move the needle.

I meant “$1M of BTC.” To be clear, $1M would move the needle in plenty of crypto currencies, but definitely not on BTC.

I think something to be a crash it need to exceed normal volatility parameter which is different for every financial assets .
Using a number in aggregate doesn’t seem adequate .

FWIW , when the dollar goes too high it’s always a sign of problem in the market .
So when u can have tariffs wars , yeah US dollar goes up .
People needs more U.S. dollar so prices goes up ( wonkish comparaison but good enough)