Analyzing Bitcoin’s Correlation with the Stock Market and Gold in Recent Time

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Bitcoin is the leading and first cryptocurrency in the world, although in its short history it has experienced a free association with different assets, however, such may no longer be the case as shown lately.

 

Analysis Showing Bitcoin Association with Others

In recent months, a report from Digital Asset Data makes clear an example of how Bitcoin has trended together with Gold swinging inversely to stock markets movement. That hypothesis gives the clarification on the reason the BTCUSD on -0.96% had a significant drop last Wednesday’s evening while Bitcoin futures trading on CME group BTCQ19, -1.55%, for instance, down to 6.1% while Dow Jones Industrial Average DJIA +1.05% the S&P 500 SPX, +1.10%, and the Nasdaq Composite indexes COMP, +1.32%, is significantly trending to the upper area.

To describe the above scenario, we analyze it in measurable terms correlating to one another showing the characteristics of such advantage of assets going similarly at a given time. For a value 1(100%) going for an excellent positive correlation in which two securities trends in complete lockstep. Represented by negative 1 and in perfect negative correlation. In this situation the digital asset explored the reaching at Gold cost as GC.1 +0.23, the SPDR S&P 500 ETF Trust SPY, +1.11%, at a prevalent exchange-traded fund against Bitcoin over a moving 90-day time span. This analysis demonstrates that as a result of the S&P 500 slipping lower, Bitcoin and Gold picked to the upside.

Certainly, seeing that the correlations are not likely to be truly critical, however, Digital Assets puts forward the defense that it is proof of a developing opinion about Bitcoin as a store of significant worth next to Gold.

“These reports have shown Bitcoin is having the prospect extensively of a store of significant worth which has the potential of utilization as a Safe-Haven asset in times of international uncertainty in traditional markets, declared in a statement by the President of Digital Asset Data, Ryan Alfred.

For most Bitcoin fans, they have generally placed crypto as an asset which is seen as the most uncorrelated asset against others and in this scenario, it is being identified as a decent option in contrast to traditional securities. In conclusion, this is what bitcoin’s association with the financial exchange and gold looks like in recent days.

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About AzeezMustaph

Azeez Mustapha is a technical analyst with many years trading experience in the stock exchange and crypto markets. He has broad experience in forex trading, coaching, and funds management.