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Fear Is Good (For Your Wallet)

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David Z. Morris

David Z. Morris is CoinDesk's Chief Insights Columnist. He holds Bitcoin, Ethereum, Solana, and small amounts of other crypto assets.

Follow @davidzmorris on Twitter

U.S. stocks are bouncing back today after a 1.8% dip in the Dow Jones Industrial Average yesterday – the worst drop in two months. Crypto assets are stabilizing, as well, after overall crypto market caps dropped by 10% yesterday, according to CoinGecko data.

Despite the size of the drop, what many investors probably experienced yesterday was more of a correction than a crash. We’ve been in a remarkably calm, damn near up-only market in equities for more than 18 months now, and even crypto has defied historical patterns to recover from a blow-off top that peaked in April. So as long as you’ve stayed the course, you’re probably not too stressed right now.

But maybe you should be.

The dip, after all, was seemingly the result of real concerns about the looming impact of specific fundamentals and negative forces, which could go a few different ways in coming months. Evergrande Group’s debt didn’t suddenly disappear, and neither did the Delta variant of the coronavirus. Both will continue, at best, nagging markets over coming months.

That makes now as good a time as any to talk about fear and the role it plays in........

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