A hand full of wild cards held by the United States could be to blame for Bitcoin’s recent downturn. The same reasons for prompting a selloff and profit-taking in stocks are also spilling into cryptocurrencies that have only just recently come out of a bear market,

Could these cards eventually act like an ace up the sleeve for investors who buy the fear over the next few months? Or will this be yet another Black Thursday style flush of weak hands?

JPMorgan Says US “Wild Cards” Are Keeping Stocks Uncertain; Same Fear Spills Into Bitcoin

Fear, uncertainty, and doubt: The three emotions are what drive most selloffs. When the pandemic first hit, panic caused an enormous crash across all markets, Bitcoin and stocks included. Records were broken, along with just about every possible level of support along the way.

RELATED READING | HOW TURNING STOCK MARKET SENTIMENT COULD DRAG BITCOIN DOWN FURTHER

These markets made a shocking recovery to set new 2020 highs, and are suddenly now at risk of another reckoning, but why? United States stock markets tumbling worse than other regions is a telling sight that its related to the US.

“This month’s underperformance of U.S. assets affirms anxiety that has existed for some time — that the U.S. would generate the greatest and the widest range of wild cards this fall,” explained in a note from JPMorgan Chase & Co. strategists.

Although Bitcoin is a decentralized, non-sovereign asset, its price has been tightly correlated to US equities for most of 2020. The correlation peaked during the Black Thursday collapse and has remained almost lock and step since.

Another deep collapse in stocks due to the current wild cards dealt could also do serious damage to the barely recovering cryptocurrency market. But what exactly are these wild cards?

Bitcoin & Major US Stock Indices Correlation Chart - S&P500 & NASDAQ | Source: TradingView

Why Investors Have Been Dealt A Royal Straight Flush of FUD

The king of all wild cards is the country’s upcoming election between two of the most polarizing candidates to enter the American political arena.

The election alone could be enough to prevent a new Bitcoin bull run from forming, however, things could get even more deadly. A Biden win is predicted to be further damage to the already fragile stock market on the brink of a bubble bursting.

The passing of a crucial Supreme Court Justice member has resulted in a shift in focus away from stimulus efforts that many American citizens rely on for survival.

If stocks sink, the stimulus is more likely to arrive. However, adding stimulus could cause the VIX to spike, analysts state.

RELATED READING | RECENT BITCOIN TOP SHARES KEY SIMILARITIES WITH BLACK THURSDAY PLUMMET

Volatility during negative momentum and tech stocks setting lower lows could be additional signs that the selloff is about to worsen. And if it does, Bitcoin could once again be brought down by the enormous weight of the stock bubble bursting.

Beyond politics, the US is still fighting a losing battle against the outbreak, suffering from a split in social issues causing widespread protest and civil unrest. With so many wild cards related to the United States, US equities, and by correlation, Bitcoin, could be in for some additional downside in the days ahead.

Featured image from DepositPhotos, Chart from TradingView