Bitcoin Forum

Am I the only one thinking that Bitcoin price movements have changed in the more recent months and now more closely resemble that of the stock market (positive correlation)?
Based on what I remember, the early Bitcoin was priced more like a hedge against corrections in the stock market.

If my observation is correct, what does it mean for Bitcoin in a coming stock market crash? Will it go down with the market as well, because the BTC market is now dominated by Wall Street investors?

What are your observations and thoughts regarding the development and possible predictions of the correlation between stock markets and Bitcoin?

I think there's a reverse relation. The stock market dips and the Crypto rises.
I'll bring in some charts and evidences in this thread later on to prove this hypothesis.

A good amount of people are saying that there is some sort of correlation between the two, though I think Crypto is too new to be able to compare to a stock market which has been here for longer then a century while crypto has been here about 7 or so years?

I want to see some actual charts with some evidence, claims like this are large and they aren't something which should be taken lightly.


This isn't true either, the opposite sometimes happens as well. Do you have any data to support your side?

I remember reading an article while back, that said that the real correlation is on the fear index, and there is no direct correlation between stock market and crypto market. So on the case of a stock crash, it's hard to know what would happen, and it would all depend on if people were actually trusting bitcoin at that time. If they were, then it would probably be like gold and stock market crashes, where gold price normally increases because investor use it as a safe haven.

Ive been waiting for it as well where I do need to see those charts which would collaborate on what hes trying to say between  bitcoin and stock market. Without any facts or research and this is based on what I had observed previously on where stock market dips and so as with bitcoin or cryptomarket too which  we wont even know on where those funds been taken out.

early bitcoin as in the mt gox only days? there's no way you can make a comparison with the hugeness of stock markets to something on one crooked market that was tiny and in a faraway land.

i think it's gonna take a long time before there are consistent and detectable patterns between bitcoin and other markets. bitcoin is still super reactive to news that would not affect any other market in any other way.

maybe with 20-30 years of history we'll be able to make some conclusions. until then it's too chaotic and patterns that people do start to have faith in will be smashed repeatedly.

I was thinking the same thing ,, with the start of increasing users and new users use bitcoin as a stock that is very easy to trade .. maybe this is the trigger factor of bitcoin price movements such as stock market

It is all part of maturing, we have new kind of traders and investors now, and they are using it like a common stock. It will come around and be used for what it was supposed, a hedge and investment into the future

I think many whales realized the trading volume of bitcoin is low enough for their dumps to appreciably depress the price. When CBOE crypto futures were announced, they bought in high volume expecting to make leveraged short plays before dumping their holdings. The media may have played a role in this by publishing falsehoods and fearmongering content to boost gains made on the high number of short plays present during that time.

In trading it may be fair to say, the smarter and more savvy traders make money, while the less experienced and less knowledgeable traders get wrecked. Savvy traders make money at the expense of less savvy traders. With the conclusion of big crypto short & dump plays made on leveraged cboe futures, we could see price stabilization. As less experienced crypto traders leave and find other things to do, that could also play a role in stabilizing the price and decreasing volatility as there could be less liquidity fueling price swings and less profiting at their expense by more experienced traders.

An example of this could be the recent price decline of bitcoin cash. As those less experienced in crypto give up trading, there is less liquidity to overvalue bch. There are fewer inexperienced traders to take advantage of or fool into buying bch and so we see the price stabilizing in the appropriate direction as less experienced traders and lower liquidity allow the price to better match its real value.

It sort of has,because bitcoin is now an investment,to the external new users. This is bound to be a thing now.
It is not dominated but yeah these wall street investors think that they run the markets. If there is a stock market crash that has any co-relation to bitcoin,in any terms,yes bitcoin may crash too. Otherwise not so much.

i see the positive correlation, yes. how close - can't say, but it is

Do you have any solid numbers like the correlation coefficient, which measures the strength of this relationship, and how it changed for the last few months? Basically, what is your methodology or is it just how you feel?

Since February Bitcoin and most altcoins have been trading in the sideways market mostly. This is normal for the stock market (on average), but that doesn't mean that the cryptomarket has turned into a variety of stock market. Bitcoin had been rising nonstop in the second half of 2017, but it wasn't always like that. There were enough periods in the past when Bitcoin behaved very much like the first tier stocks, for example, in the first half of 2015 when it had been trading between $200 and $300.

If we see for last couple of months, Bitcoin values went up along with the stock market and went down as soon as the stock market crashed.
Though cryptocurrencies have their own economy based on their own activity on blockchain and equities have their own economy based on earnings per share multiples.

In my opinion, BTC's influence on the stock market can be believed, but they are not related to each other. When the Crypto market develops, they will attract many investors to quit the stock market and switch to holding the altcoin. So the stock market today will be more bleak than in the past.

Я дyмaю, чтo движeниe цeны биткoинa никaк нe кoppeлиpyeт c фoндoвым pынкoм. Boт кoгдa кpиптa зaмeнит фиaтныe дeньги - тoгдa дa, бyдeт.

I think the speculative element has become stronger withing the Bitcoin scene, since last years ATH. We are seeing more focus on the "price" than the technology and a lot of people only entered the scene,because of the high probability of "quick" profits. The ICOs has also added to that speculative frenzy with investors.  ::)

The latest price decline and some timed dumping, chased away some of the weak hands.  ;D

I haven't made the effort to collect stock exchange and Bitcoin price data yet. It's just my personal (subjective) observation. I might do it when I have more time at my disposal.

I don't know if you're already looked through the internet or if you really want to do this by yourself, but data about this already exist:

https://www.investopedia.com/news/are-bitcoin-price-and-equity-markets-returns-correlated/

There are a lot more, and the consensus seems to be that there is some correlation. As for your original question, I would think that the entry of institutional investors would only serve to increase correlation. It really hasn't happened en masse yet, so you could probably still use Bitcoin as a hedge against the stock market right now, but probably not for much longer. It's pretty sad if you think about it.

Im not sure what others are thinking about it but I see no connection between the two different worlds at all. There is no way stock is affecting the crypto currency because there is no internal connection between them and neither there are any transfers from crypto to stocks at all. However, there is surely effect over the stocks because of the crypto currency as most of the stocks are being sold because want to have investment into the crypto currency and thus it might have effect on it. But the situation other way around to this one doesnt look rightful to me.

Are you sure that there is a correlation between the stock market and the crypto market? I am not sure that there is such a correlation I have not noticed this correlation. Let us have a look at the stock market as we can see the stock market is near its historical peak (I mean DOW and S&P500 indices) however the crypto market is somewhere nearby its lows. So, what kind if correlation do you mean?
As far as I know plenty of traders are waiting a strong deep correction on the stock market but I do not think that this future correction will hit substantially on the crypto market. I can suppose that the falling stock market will affect the crypto market but just a little.

Currently I don't think there exist any relationship between bitcoin and the stock market. All the changes that we see on the crypto market is many due to the activities of powerful crypto enthusiasts. Usually changes on the crypto market are mainly due to manipulations.

Theoretically there should not be any correlation; however it is easy to verify how some of the recent "collapses" occurred in conjunction with large drops on the stock exchange. Not only that, it seems to me that the media have focused on the collapse of the bitcoin to hide the collapse of the stock exchange ... MHO

The great recession or market reset are on its way so things are getting worse and it's not a good sign to trade nor to invest a cheap coins. They said Gold/silver and cryptocurrency is a safe heaven asset coz dollars will slowly to go down.

Hard to see correlation between stocks market and cryptocurrency market because i think its different market. But i think if stocks market collapse, maybe stocks investor will switch their investment to cryptomarket for their own security

True. But crypto market is unreliable. It grow fast and fall even faster. 

The stock market is supported by the real economy, while the cryptocurrency market is not supported by the real economy!
This is the main reason why people are keen to invest in stocks instead of cryptocurrencies!

It has changed for the worse for us. Back in the day when there was a crisis somewhere in the world people moved their money to coins so they would be undamaged from the crisis. When greece had a economical crisis people bought bitcoin as much as possible so when the government wanted to put a limit on stuff they wouldn't be affected.

There was people from cyprus who had lost millions of dollars because government was badly managed and they needed money to pay the debt and did some insane stuff so all of them moved their assets to crypto. Nowadays when there is a market crash somewhere people cash out their crypto first, stock markets became once again a popular option for investors instead of moving their money to crypto. It became one of the first things to cash out.

I am not sure if you were correct but since you have an observation i will be waiting for your graph. More likely I wss thinking that it might just be a coincidence. Before I also saw a situation in which both markets are at its highest peaks in the same time frame

the two comparisons differ greatly. many investors are more comfortable investing in stocks, because with clear legalization. whereas in cryptocurrency only a few of the stock investors switched to him

I don't think the relationship has changed and bitcoin and stocks do react to both technical and fundamentals analysis.  I believe that bitcoin is still at the early stages and one really need to understand how to trade stocks and apply the knowledge to bitcoin.

There is comparison of Nasdaq chart and Bitcoin chart
 Both are like mirror reflaction
Nasdaq up Bitcoin up Nasdaq down BTC down
It has simple explanation appetite  on risk and money in market
money is like a fuel if prices are to high to buy investors are shorting

So you were saying that you have the same observations with @legendster?

There are really more investors from the stock market as it was more established  if we do talk about the numbers there were really few scenarios that there were only few differences especially when we look at the volume of trading on that day