AQR Capital Management Aaron Brown, head of financial market research at his company, estimates that the current price of Bitcoin is currently 20% below its historical correlation with other prices in the other market. bitcoin The price dropped as low as $18,603 on June 30 and marked a low, then partially recovered and continued to trade at $19,201.
Four factors identified by Brown have accounted for 88% of the change in Bitcoin price over the past four years. Here are the four factors identified.
Gold Price
It is often on the agenda that Bitcoin is associated with gold. The notion that this correlation should be “positive” is common, as both gold and Bitcoin are used to maintain value without being affected by current inflation. On the other hand, when other factors are taken into account, it can be seen that there is a large negative correlation. Gold and Bitcoin are on opposite sides of each other because of the belief in existence.
Volatility in Technology Stocks and Bitcoin Price
Koinfinans.com As we reported, today the proxy portfolio paired with one Bitcoin (on average) consists of $21,000 borrowed money and $50,000 borrowed gold and $82,000 of the Nasdaq 100 Technology Index. So, the present value of this proxy is $11,000, but we add $8,000 for the current level of the Nasdaq index and $6,000 for the value of Bitcoin volatility to get $25,000 against the current market price of about $20,000 for Bitcoin.
To put these complex calculations more succinctly, $82,000 in the Nasdaq portfolio is like buying a BTC and putting $82,000 in technology stocks. If these stocks rise 10%, BTC should increase by $8,200. If these stocks fall 10%, bitcoin loses $8,200. More detailed analysis on this subject was carried out by The Washington Post, you can check the relevant source for detailed analysis.
In this sense, the token seems to be “cheaper” at the moment. Other than the March 2021 spike, the proxy portfolio has done a good job of tracking Bitcoin prices since 2018.
General Market Volatility
Bitcoin has options-like properties, so when the market is volatile, its price rises. The Nasdaq index volatility plugin is currently worth $8,000. If the index volatility increases by 50%, the BTC price could increase by around $4,000, and if the volatility drops by 50%, it could drop by $4,000. If BTC volatility increases or decreases by 50%, there could be a $3,000 gain or loss in a Bitcoin price if there is an add-on to BTC volatility of $6,000.
You can follow the current price action here.
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.