While Bitcoin has been called “digital gold” many times, the world’s largest cryptocurrency now appears to be emulating another investment vehicle: stocks.
Crypto market information provider Arcane Research Bitcoin’s correlation with the S&P 500, according to data tracked by October 2020at its highest level since This roughly coincides with when Bitcoin woke up from a prolonged sleep and started to rise above $20,000.
The aforementioned correlation came to the fore shortly after Bitcoin appeared to be diverging from traditional markets following the Russian invasion of Ukraine. NASDAQ and S&P fell 6% in a month. bitcoin and Ethereum gained about 18% during this time. In the last week of February, Bitcoin S&P its correlation with , dropped from 0.564 to 0.461.
However, the 90-day correlation between Bitcoin and S&P returned to 0.49 on March 18. To be more precise, a score of 0 means no correlation, while a score of 1 indicates a perfect correlation.
In Arcane’s report yesterday, “Bitcoin’s correlation with the S&P 500 has been higher than this level for only five days in BTC history, showing that the current correlation is unprecedented in BTC’s history.” expressions were used.
This confirms Bank of America’s analysis earlier last month that Bitcoin is trading more like a risk asset and has been doing so since last July. On the other hand, its correlation with gold close to zero left. In this respect, the bank does not expect Bitcoin’s price movements to change until its volatility subsides.
Still, a Bitcoin whale and CEO of MicroStrategy Michael Saylorcontinues to adhere to the “digital gold” thesis: “Bitcoin is gold perfected – digital gold,” he told CNN Business on Wednesday, and “is also a perfected property – digital property.” made the statement.
In reality, both the stock correlation and the digital gold proposition can be true at the same time.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.