Why this investor says it's a great time to buy stocks, crypto

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CNBC’s “Squawk Box” team discusses markets, Fed, crypto and more with Sylvia Jablonski of Defiance ETFs and Joe Terranova of Virtus Investment Partners. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

The price of bitcoin dropped sharply Monday as investors began shedding risk amid a global equity markets decline.

Many people have argued that bitcoin is most useful as a safe-haven asset, but that narrative could be changing as people realize its price often goes down with broader declines in risk assets. Bitcoin’s rally this year has coincided with the risk-on rally and, much like stocks, the cryptocurrency is prone to sharp declines in September.

Bitcoin lost as much as 10% on Monday morning. It was last down more than 7% at $43,790.25, according to Coin Metrics. The broader crypto market was in the red too, with ether down 8.5% to $3,060.80, as were crypto-adjacent stocks. Coinbase and Microstrategy lost 3.5% and 4%, respectively, while Square slipped by 2%. In crypto mining stocks, Riot Blockchain fell 6% and Marathon Digital fell 5%.

“This sell-off is the continuation of a well-established pattern where traders cash in their riskier assets to cover margin calls or sit on the sidelines until markets calm down and they feel more comfortable going back into riskier positions,” Valkyrie Investments CEO Leah Wald told CNBC. “If ever bitcoin had the opportunity to establish itself as a safe haven or as digital gold, with U.S. companies also signaling their earnings calls are going to reveal poor results, now feels like the time.”

Jim Paulsen, chief investment strategist at the Leuthold Group, said that although bitcoin tends to dip with the broader markets, that doesn’t mean it has any correlation to stocks and went further to say that correlation is “virtually zero.”

“That doesn’t mean bitcoin can’t go down with stocks – and I agree that it often does – but I think it goes down differently than stocks,” he told CNBC. “To me it’s a very diversifying asset against most of the other things in the portfolio. That in itself can lend itself to lower volatility, but it doesn’t necessarily mean that it won’t participate in risk-off periods. There’s a difference between safe haven and diversifying.”

Paulsen added part of the reason bitcoin has been branded a safe haven has to do with its characterization as a currency, which was part of the initial vision for it as written in the original white paper.

“Because it was put into the bucket of currency, it’s looked at as a safe haven because the dollar is a safe haven that you run to in times of risk off attitudes among the public,” he said. “But this is the farthest thing from a currency you can imagine. It’s a method of exchange, but it is not a currency.”

While bitcoin was sliding, gold futures climbed 0.8% to $1,765.40 per ounce.

Global equity markets are sliding as investors fear spreading risk from a shakeout in China’s property market tied to highly indebted developer Evergrande. Investors are also focused on the Federal Reserve and whether it will signal its readiness to start removing monetary stimulus from the economy. The central bank will begin its two-day meeting Tuesday.

Fundstrat’s Tom Lee said the sell-off is showing how much investors have come to value 24-hour liquidity since the start of the “Covid era.”

“Both institutions and individuals more willing to go to cash because there’s less friction in terms of liquidating. Bitcoin selling off to me is interesting because I suspect it has a lot to do with risk off in Asia,” where savers tend to put their money into property and crypto more than equities, Lee explained on CNBC’s Tech Check Monday. “I don’t think bitcoin’s decline today is actually very ominous, but it is showing you that people really value liquidity.”

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Responses (25)

  1. 🖕🖕 really appreciate you for your helping I got my account unbanned you are a pro

  2. Immediately after I lost my job I taught life has come to an end not knowing that God has a better plans for me has been of good help to me and my family also contact

  3. Immediately after I lost my job I taught life has come to an end not knowing that God has a better plans for me has been of good help to me and my family also contact

  4. Just do something that will earn you money while you sleep, no matter how little.
    The pandemic is a perfect eye opener to really see how life can be without the usual income stream and everyone had to sit at home, well I never felt it because of my investment in a trading company where I earn 4 figures weekly. The best one can do for himself is to invest more and spend less

  5. I came here to learn how to invest after listening to a guy on radio talk about the importance of investing and how he made $460,000 in 4 months from $160k, somehow this video has helped shed light on some things, but I'm still confused, I'm a newbie and I'm open to ideas.

  6. "When the market has fears of becoming bearish, that's the best time to take on risk."

  7. People be acting like the stock market is Vegas, and it is not. If you are buying stock, do not sell it because you made a profit. Hold onto it. If you are making capital gains, you have to pay 40% in taxes on it. People keep selling and reinvesting. The more one keeps doing that, the more taxes you are going to have to pay. When you sold that last stock. Leave your stocks alone and let them grow. People sell because their stocks have went down. Don’t do that either. If it’s a major jump, then you can sell it. For instance, if you bought 100,000 shares for 0.0001 and it’s goes to $1, then I would sell it since you made $100,000. But be aware of the 40% tax. Hold on to stocks for a year for the tax to drop to 20%

  8. The best investment one can do right now is investing on Forex trading though stocks are good but ever since I swapped to Forex, I've seen much difference.

  9. so many news you don't know what to believe

  10. I belong to the class of those watching YouTube videos every single time and yet without positive result. I heard people make alot of money out of binary,stock and forex trading,and I used to imagine how?

  11. Invest in China for loose money
    For growth invest in India 🇮🇳

  12. Does she work for the government?

  13. Don’t be disillusioned this is a terrible dip what is your upside 5% max just hold or sell correction is coming especially priced in gold

  14. I Know a lot of people here follow uranium.
    Now it is the time to buy:
    Uranium insider pick 1: encore energy
    global atomic ( 2 uranium insider)
    Jhon quakes: fission
    Me buying now: asx explorers because they didnt run and insiders buying and owning A LOT:
    GTI resources ( crazy depósit in Wyoming, insiders 20%)
    DLC ( insiders 49% of the company)
    92 energy ( they found uranium)

  15. Why are these people acting and behaving as if buying from crypto markets is a slightly funny and strange thing? Like as if we are talking about aliens and UFOs? Which by the way has been a governmental disclosure and more openness now.. Anyways… Buying internet technology and block chain assets is not funny nor weird. Billions of people and very large billion and even trillion dollar institutions and companies think otherwise. Even whole governments take it a serious mater with either adoption and regulation…

  16. they say AMC is the best at the moment. But do have an idea how well it would do? I just returned and set aside $83k to invest aggressively with mainly AMC and NIO kindly let me know your thoughts.

  17. The general market for some days has been going up and down and even the crypto market is not left out, but the good thing is that every market gives us a certain leverage to benefits from. For me, i'm taking full advantage to continue bitcoin day trading so as to grow a very strong portfolio ahead of the major bull market after this short correction. Pro trader Travis Neil deserves all praises from me due to his unfailing efforts, signals and guidance towards his traders. I'v gained 6.3btc trading with his signals and services… SUPERB****

  18. Thanks god 👆👆for sending me a helper like this seyvahack you are the best sir🙏🙏

  19. I HAVE BEEN MAKING LOSSES TRADING MYSELF…I THOUGHT TRADING ON DEMO ACCOUNT IS JUST LIKE TRADING THE REAL MARKET… CAN ANYONE HELP ME OUT OR AT LEAST ADVICE ME ON WHAT TO DO?

  20. Thanks so much for your help,🖕🖕you are true to your words and I’m happy working with your Bitcoin_trade🖕🖕look up

  21. I WILL NEVER STOP APPRECIATING YOU AND I CAN NEVER FORGET YOU IN LIFE FOR SAVING ME AND MY FAMILY FROM POVERTY THANKS FOR THE 3BTC💯

  22. I WILL NEVER STOP APPRECIATING YOU AND I CAN NEVER FORGET YOU IN LIFE FOR SAVING ME AND MY FAMILY FROM POVERTY THANKS FOR THE 3BTC💯

  23. I have been investing in stock since 2013, but I must confess that since I started trading and buying crypto I have made more, this is the FOMO September for incoming dip in October. It is manipulated but that can be a good thing if you understand it. We should all know that when these reports are bullish take some off to the side lines, when news gets bearish start buying. "Keep it simple simple" that bear/ correction was the best thing that happened me. but all thanks to Kevin Kuria John for his amazing skills for help me to earn 17 BTC through trading chart. I believe we are in the spring phase

  24. 👆👆I really appreciate your help sir you put a smile 😃 on my face ..

  25. 👆👆I really appreciate your help sir you put a smile 😃 on my face .. amp