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The collapse of the tech that began last week continued into Tuesday, as stocks fell more than 600 points. The tech-heavy Nasdaq lost 3% during the course of trading, as investors fled the sector.

The current collapse, after months of strong growth, saw investors flee to other assets. News of a continued stalemate in Congress over future stimulus checks also weighed on markets. These forces have in turn had wide-ranging effects on other sectors including bonds, oil, and Bitcoin.

The current declines in tech stocks began last week, as investors began to sell out of positions. The Nasdaq lost 3.9%, with the so-called ‘FAANG’ stocks losing between 3% and 5% each.

Analysts had been suggesting that the sector was over-bought for some time. Valuations were substantially beyond historic levels, with companies like Tesla and others leading the way. Shares of the electric car maker dropped 18% on the day after it was snubbed by the S&P 500.

The market collapse touched the Dow Jones Industrial Average (DJIA) as well, with the index losing as much as 650 points. Most other equities also fell, as investors sought out safer choices.

These included Treasury bonds, which saw yields fall substantially. Yields move inversely to price. As prices rise with buying, yields fall. The ten year Treasury note saw yields fall 4 basis points to 0.678%, while the 30-year note fell 6 basis points.

The Treasury movements indicate that investors who took profits from the strong tech run-up were seeking havens during the collapse.

Oil also saw substantial declines, as the tech and DJIA seemed to indicate that demand was not going to be increasing. With the heaviest driving months over, and the OPEC nations not honoring production decreases, oil appeared largely overvalued as well. Brent crude fell below $40/barrel for the first time in months.

While the stock collapse would potentially drive investors into Bitcoin, the price of the leading cryptocurrency was also down on the news. BTC fell below $10,000, an important support level.

The decline also puts into question the narrative of Bitcoin as a safe haven asset. Investors flocked to T-bills, and gold remained stable during the volatile trading day, but bitcoin declined. The situation could indicate deeper problems for Bitcoin in the coming days.

The post ‘Tech Wreck,’ Stock Collapse Having Far-Reaching Ramifications for Other Assets appeared first on BeInCrypto.

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