Caleb Franzen, crypto and stocks researcher and senior market strategist in Cubic Analytics, shares an interesting chart with his Twitter followers. There is a stock on NASDAQ that has kept a positive correlation with the Bitcoin (BTC) price for at least six years.
Bitcoin (BTC) is correlated to Micron Technology (NASDAQ: MU) for years, analyst Caleb Franzen says
In his Twitter thread, Franzen demonstrates the price dynamics of Bitcoin (BTC) and Micron Technology Inc. (MU), a stock of the U.S.-based "memory products" firm launched in 1978.
🟠 #Bitcoin— Caleb Franzen (@CalebFranzen) February 10, 2023
🔵 Micron Technologies $MU
I've been highlighting this relationship since last June and it has continued to illustrate the tight correlation between #BTC and semiconductor stocks.
Scanning hundreds of stocks, I can't find any other company this correlated to BTC. pic.twitter.com/OPyYSEzURL
Idaho-headquartered Micron Technology offers computer memory and computer data storage solutions, including dynamic random-access memory, flash memory and USB flash drives. The company went public through an IPO in 1984. As of 2022, its headcount surpasses 48,000 employees.
Typically, the MU stock performance slightly lags behind the rates of the biggest cryptocurrency: it printed macro tops in June 2018 and in January 2022.
On Franzen's scheme, both charts are displayed in logarithmic scales. It looks like the positive correlation between MU and BTC gets stronger and stronger over time.
As covered by U.Today previously, the correlation between the Bitcoin (BTC) price and NASDAQ stocks spiked in 2022; analysts claim that this fact might ruin the "digital gold" narrative around the orange coin.
Why is this crucial?
Franzen explained that traders can benefit from this correlation. For instance, it gives them one more instrument to improve risk management by reallocating assets in their portfolio:
Bitcoin investors could hedge their exposure against BTC by shorting MU or the broader semiconductor industry without ever having to reduce their BTC position
Also, this dependency can be useful in reevaluating this or that macro signal for the Bitcoin (BTC) price. In discussions with cryptocurrency skeptics, the BTC/MU correlation can be used to prove the maturity of the nascent digital asset industry.
As of printing time, Bitcoin (BTC) is changing hands at $21,700: due to the regulatory crackdown on staking in the U.S., its price tanked by 7% from its local top.