Low Correlations Between Bitcoin and Stock Markets

03/15/2023 12:16 • AI & Tech Insights • 61 views

According to reports, data shows that the 30-day correlation between Bitcoin and European stock markets has fallen below – 0.2, the lowest level in more than two years. In addition, the 30-day correlation between Bitcoin and NASDAQ has fallen to about 0.2, the second lowest level in more than a year (previously below 0.2 in November 2022).

Data: The 30-day correlation between Bitcoin and European stocks fell below – 0.2, hitting a two-year low

Analysis based on this information:

The recent reports suggest that the correlation between Bitcoin and European stock markets has fallen below -0.2, which is the lowest in two years. The 30-day correlation is an important indicator that measures the relationship between two markets, and the latest data indicates that Bitcoin is not tracking the performance of the European stock markets. In addition, the 30-day correlation between Bitcoin and NASDAQ has also fallen to 0.2, which is the second lowest in more than a year.

The fall in correlation between Bitcoin and stock markets is a significant development in the cryptocurrency market. It indicates that Bitcoin is evolving into an asset class that is less influenced by traditional markets. This development could attract more institutional investors who are looking for alternative investments that are not closely tied to the movements of the stock market.

There are several reasons why the correlation between Bitcoin and stock markets has decreased. First, the global economy is recovering from the pandemic, and this has led to a divergence in the performance of different markets. As a result, Bitcoin is not moving in line with the stock markets. Second, Bitcoin is becoming more mainstream, and more investors are entering the market. As a result, there is a higher level of liquidity, which reduces the impact of stock market movements on Bitcoin.

Despite the low correlation between Bitcoin and stock markets, it is important to note that Bitcoin is still a volatile asset. It is still subject to fluctuations in price due to a range of factors, such as changes in regulatory framework, technical glitches, and cyber-attacks. However, this low correlation suggests that Bitcoin is maturing as an investment asset, and it is becoming more independent of the fluctuations in traditional markets.

In conclusion, the low correlation between Bitcoin and stock markets is a significant development in the cryptocurrency market. It suggests that Bitcoin is evolving into an asset class that is less influenced by traditional markets. It could attract more institutional investors who are looking for alternative investments that are not closely tied to the movements of the stock market. However, it is important to note that Bitcoin is still a highly volatile asset and investors should assess their risk tolerance before investing.

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Low Correlations Between Bitcoin and Stock Markets

Data: The 30-day correlation between Bitcoin and European stocks fell below – 0.2, hitting a two-year low

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