Bitcoin's (BTC) Correlation with U.S. Stocks Reaches New All-Time High: BitMEX Research

News
Mon, 03/30/2020 - 14:03
article image
Alex Dovbnya
Bitcoin continues to trade in tandem with the S&P 500 as their correlation reaches a new all-time high
Bitcoin's (BTC) Correlation with U.S. Stocks Reaches New All-Time High: BitMEX Research
Cover image via stock.adobe.com
Contents

Bitcoin's correlation with U.S. equities has reached its highest level ever, according to BitMEX Research. 

The coronavirus-induced liquidity crisis has proven that crypto might not be the most reliable hedge for investors who want to shield their wealth during the severe pandemic

Related Mike Novogratz Explains Why Bitcoin (BTC) Is Failing as Safe Haven
Related
Mike Novogratz Explains Why Bitcoin (BTC) Is Failing as Safe Haven

It didn't happen overnight 

Bitcoin used to act as a safe-haven asset since it moved in tandem with gold against the geopolitical backdrop that involved such events as the Cypriot financial crisis (2012-2013) and the upset victory of Donald Trump (November 2016). 

However, when BTC ushered into the mainstream in 2017, it started to display the characteristics of a risk-on asset, thus becoming somewhat ambidextrous.   

During the coronavirus mayhem, in which, in John Bollinger's words, all correlations tend toward zero, BTC simply became a high-beta proxy for equities. 

Related Peter Schiff Slams Bitcoin (BTC) as Safe Haven Asset as Stock Market Keeps Plunging
Related
Peter Schiff Slams Bitcoin (BTC) as Safe Haven Asset as Stock Market Keeps Plunging

Gold remains the go-to safe haven 

In today's newsletter, Bloomberg's Joe Weisenthal notes that the demand for gold is soaring right now because investors view it as the only viable safe haven. Coupled with the disruption of gold's supply chain, this presents a perfect bull case for the lustrous metal.

This flies in the faces of anti-gold Bitcoiners who believe that its digital version could ultimately replace bulky rocks

article image
About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.