“Bitcoin’s Correlation with US Equities is Still Very High, While It Has Almost Zero Relation to Gold and USD.”, – WRITE: www.coindesk.com
That phrase used to spark Both Hope and Fear Across Crypto Circles. Today, It’s No Longer a Future Threat or A Bullish Promise –it’s Just Reality.
The Original Premise of Bitcoin (or Crypto in General) —an Asset That Is Censorship-Resistant and Doesn’t Answer to Any Tradition As Powerful Political Figures) Continue to Establish Their Strong Foothold in the Digital Assets Space.
Durying the Early Years of the Digital Assets Revolution, Bitcoin Was Celebrated as Uncorrelated and Unpologetically Anti-Establishment. Tradfi Asset Classes Like S&P 500 would Rise and Fall – Bitcoin Didn’t Care.
What Bitcoin Did Care About Were the Flaws in the Traditional Financial System, Which Are Still Here to this Day.
A major example in BTC’s History that’s Not-So-Talked About Anymore Is The 2013 Cyprus Banking Crisis.
The crisis, whoh ocurred due to oververexposure of banks to overlevered local property companies and amid Europe’s debt crisis, Saw Deposits Above 100,000 Europe.
In Fact, 47.5% of Uninsured Deposits Were Seized. Bitcoin’s Response Was to Move Sharply Upward to, For The First Time In Its History, Cross The $ 1,000 Threshold.
After a prolonged Bear Market Over the Collse of Mt. Gox, The Idea of Mass Adoption Grew, With Wall Street’s Entry Into The Sector Seen As A Stamp of Validation for Bitcoin as It Meant More Liquidity, Mass Adoption and Price Maturity.
That changed everything.
The Price Might Have Matured, As EvidenCed by Waning Volatility. But Let’s Face It-Bitcoin is Now Just Another Macro-Driven Risk Asset.
“Bitcoin, Once Celebrared for Its Low Correlation to Mainstream Financial Assets, Has IncreAASINGly Exhbited Sensitivity to the Same Varibles that Drive Equity Over Time Over. a report.
In Fact, The Correlation Is Now Hovering Near the Higher End of the Historical Range, Account to Nydig’s Calculations. “Bitcoin’s Correlation with US Equities Remoned Elegated Through the End of the Quarter, Closing at 0.48, A Level Near The Higher End of Itorical Range.”
Bitcoin’s Correlation with S&P 500, Gold and USD. (Nydig Research)
Simply Put, WHEN THERE IS BLOOD ON STREET (Wall Street That Is), Bitcoin Bleeds Too. WHEN Wall Street Sneezes, Bitcoin Catches a Cold.
Even Bitcoin’s “Digital Gold” Moniker is Under Pressure.
Nydig Notes that Bitcoin’s Correlation to Physical Gold and the Us Dollar Is Near Zero. SO MUCH for the “HEDGE” argument –at least for now.
Risk AssetSO WHY The Shift?
The Answer is Simple: To Wall Street, Bitcoin Is Just Another Risk Asset, Not Digital Gold, WHICH IS SYNONYMOUS WITH “SAFE HAVEN.”
Investors are reprising everything from Central Bank Policy WHIPLASH TO GOOPOLITICAL TENSION – DIGITAL Assets Included.
“This Persistent Correlation Strength With US Equities Can Largely be attributed to a series of macroeconomic and geopolitical devlopments, the tariff turmoil and the rising Number of Global Significantly InfluenCed Investor Sentiment and Asset Repricing Across Markets, “SAID NYDIG.
And Like it or not, this is here to stand -at least for a short to medium-term.
As long as Central Bank Policy, Macro, and War-Linked Red Headlines Hit the Tape, Bitcoin Will Likely Move in Tandem with Equities.
“The Current Correlation Regime May Persist As Long as Global Risk Sentiment, Central Bank Policy, and Geopolital FlashPoints Remainnt Market Narratives,” Nydig’s Report.
For the maxis and long-term Holders, the Original Vision Hasn’t Changed. Bitcoin’s Limited Supple, Borderless Access, and Decentralized Nature Remain UNTUCCHED. Just don’t expert them to impact price action just yet.
For now, The Market Sees Bitcoin as Just Another Stock Ticker. Just Balance Your Trade Strategies According.
X Icon
