Bitcoin Forum

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During steep market crashes, asset classes tend to converge. At the onset of the current stock market fall, both Bitcoin and gold had sharp correlation peaks with the stock market.

Now, however, Bitcoin is once again becoming a non-correlated asset.

They were correlated for psychological reasons imo. Fear, panic etc caused by the pandemic and the very strict measures, to be precise. Like I said before, people all act the same way in some events. Example: if mandatory lockdown is imposed, everyone will think about the need of cash for their utilities, food etc => they sell assets they own.

Now, as we've all probably seen, the tensions are way smaller than they were 2-3 weeks ago. People are just now starting to think rationally and not in panic, so I expect them to start buying safe haven assets. I would've expected this to happen way later though. But give the world one more crappy news about the virus, get them back into panic mode and see all assets and stocks go correlated once again..

The stock market crashed because of the world problem facing now and the connection between bitcoin and stock is really limited.Both have their own economy, based on activity and based on earnings. Bitcoin price now surges above $6.7K because many people are in there home and can focus on online works like in crypto market.

People are just the only one who do make this thing complicated on where they do always correlate bitcoin/crypto market with typical stocks/forex/indexes
when it comes to price movement.We can presume but knowing totally the reason behind their volatility will always be a question.We have seen that crypto market
is starting to cling up or recover but on stocks? They are still on reds and i dont know why people do still keep on pushing this kind of analysis between
markets.

There may have been some differences between the two crashes:
1. The stock market crashed because many companies were expected to fail under the pressures of the pandemic
2. Bitcoin collapsed because some people expected a huge collapse since the stock market lost 5 trillion and bitcoin only lost <100 billion in market cap and had a lot lower market cap to start with... There was also no offered bailout strategy with bitcoin as there was to the stock market - and look how much better it's done already at rebounding...

You can't really draw a correlation just by looking at one week's pricing chart. It's not enough to conclude anything. When the global stock market is crashing - you need to remember that it is crashing for a reason. Majority of the industries are shut due to lockdown and that's why their stocks are crashing which is also bringing down the index.

Do you know the reason why the bitcoin price is going up and down? The answer is NO, so we are only assuming that it is happening due to the global sentiment but there's no way to verify the actual reason.

Bitcoin should ideally be the non correlated asset, but the current time is very very difficult to explain and speculate!

Well maybe the Bitcoin price is rising because people have started watching Bitcoin as a true store of value and not just a bubble. Most of the economies will now come in recession due to the Corona endemic and thus people need more money for living their daily life so now they will start selling their assets and this will continue to the greater fall of the stock market in the upcoming future.

Most likely that is the case why the stock plunged because of the covid and businesses closures. Not only today that the stock market plummeted, every one should expect a down from a stock whenever there is a problem, a huge problem that the world is facing and every thing is affected. As the situation is getting hard for us to control, I guess it will continue to flow below the lines.

Well as for bitcoin, I don't see any relation with it to stock market and the most likely scenario for it being down is the fear from its people because of the virus as people are needing money so maybe there is a massive pullout from individuals who own bitcoin.

Well, this isn't a new thing for those who have been here and had experience the bigger event of Bitcoin halving which always took place every five year. Next month is the dee month for the said event and many are trying to get their investment into Bitcoin right now. Though, the rise of Bitcoin price is because of the next month and many would love to participate, comparing Bitcoin to stock when we'll know that, there is a bigger event ahead doesn't look to me as serious case here.

This was expected because investors were probably pull back their crypto or non-crypto assets into fiat just because preparing in covid19 lockdown. I f you will see, this pandemic has a huge impact on the global market. Sometimes we think that it is correlated or just a coincidence. It is really hard to explain but experts have explanation on this by their predictions and theories and 90% the same result. Just because of covid19.

Yeah, Looking at the bigger picture this is the problem that everything is facing not just the stock market, crypto space or oil industry. What I mean by everything is literally everything. The pull downs are due to the virus, we don't have any thing to blame but this one coz it's not a coincidence. And this is not the first time that we have seen a market declining because of the pandemic, we already seen it from the past.

There is no direct correlation however this is not a coincidence, so what is it then? I have nothing to coin it but it is pretty obvious tho.

Now, this got me thinking what's behind this recovery for bitcoin. Is this now being correlated to the recent US' stimulus efforts?

That was completely missed by me until someone brought it up on another thread. It's possible since gold is no longer really an uninflated asset that people are turning to bitcoin as the government's inherently have no control over its function and there's 21 million until the community technocratically decides otherwise.

Bitcoin was never corelated with stock market unless majot economic issue arise like corona pandemic has dropped every stocks and bitcoin price. Stocks price depends on things related to that particular stock like company to perform good or bad but bitcoin price depends on news related to bitcoin. Both are different categories and price correlation is just a coincidence.

But its correlated on the current happening since the people are securing to buy some food stocks that's why we see the price of it got drop for the past several months. and although the stock and bitcoins doesn't have relation at all but in the times of crisis both will suffer from major drop out.

But one thing good in stock is they can easily recover when market is in good shape but its so questionable for bitcoins to pump since we need a mass adoption.

Those people who doesn't know the value of Bitcoin will crash and burn with these financial crisis. Many Institutional investors expecting and thinking that the price will go back down to $500 or $0 because it has no fundamentals.
But this time, Bitcoin could potentially replace the stock market and fiat system.

What do you mean that bitcoin can potentially replace the stock market? Cryptocurrency market and stock market have no correlation at all because they are totally  different financial instruments to each other. Their functions and importantance are also different so how do say so that bitcoin can potentially replace the stock market? On what terms?

I think bitcoin is really slowly "decoupling" with stocks specially in this current scenario.  Just like what we are witnessing in the last 24 hours surge of bitcoin price. I think traditional stock investors are mostly moving away and likely testing how bitcoin could be a good alternative for them.

It could be that Wall Streets are looking for other options and the current trend could be very well a good evidence on that theory. And even though we have heard that there is a stimulus package in the US, still traditional markets didn't react positively, while bitcoin gets over the hump of that $7k mental barrier.

Bitcoin is now sitting at above $7,000 while stocks are still down. Bitcoin really does took a damage from inial fear during the month of march. Now Bitcoin is steadily going up again despite coronavirus and stocks still on the loose. Maybe it's time to separate stocks and cryptocurrency correlation?

bitcoin has never had any correlations with any other market specially stock market ever and it didn't start to have any now either. if anything bitcoin is correlated to the global fear which was the only reason why bitcoin price dropped in the first place.
also if there were any correlations bitcoin should have continue falling like stocks all through march instead of reversing and going in the opposite direction (up) unlike stocks.

The Stock market is still down,because a lot of companies that have stocks included in the indexes are still suffering from the lockdowns.When the lockdowns are over,those companies will start to recover their revenue slowly.Bitcoin is not a stock.It's not tied to any company in the world.Gold is the same type of asset as bitcoin.
Like I said many times before,comparing Bitcoin with stocks is like comparing apples with bananas.

Stock and bitcoin are different market. Stocks are shares on the company that is sold publicly and bitcoin is more of a currency. They are both going down because we are facing a crisis and that explains the correlation of stock dump and bitcoin dump.

I agree with those mentioning that Bitcoin and the Stock market never really correlated and the whole situation for these two is different, so no wonder they've parted ways. The stock market depends on the world economy and vice versa. If things are going well, there are good conditions for businesses to flourish, so does the stock. When it comes to Bitcoin, there are indeed some dangerous situations when there are bugs in the code, major countries speaking of restrictions or huge exchange hacks. These things would naturally cause the price to go down. However, the price usually goes up due to panic selling, when there isn't anything that really affects Bitcoin going on. And then there are events which affect the world population, so they can trigger a decrease in every area. This is what the pandemic announcement did to Bitcoin and Stock. However, since the stock is truly in trouble 'cause of the quarantine, Bitcoin is not, and thus seems to be recovering.

And I see no reason why it should be. Stocks are directly affected by the assets bound to them, just look at how oil and gold crashed. On the other hand, Bitcoin is a digital asset, one that isn't bound to anyone or anything. It's completely managed by the community that upholds it. That's it. The reason why BTC crashed can be attributed to people needing funds as well as seeing a massive crash in stocks, people thought that BTC would probably follow. It's basically a bundle of fear and the like that caused the crash, which is completely unreasonable since anyone who trades in BTC and stocks should know the difference. Another probable reason is it dropped because not of stocks, but because the economy itself dropped. With how majority of the companies outside have closed down temporarily, you could expect a difference in the normal cashflow to the current cashflow.

This is very good news. But Bitcoin has shown signs for quite some time that it is independent of stocks. The collapse of markets, bitcoin and gold, was primarily associated with the collapse of oil, and there was also the fear and panic from the coronavirus.

Sometimes they are correlated with each other but it never tells that they are both moving at the same scheme.
Maybe at this time, it gives them a way to interact with each other because of the pandemic issue. But looking at how the market trend shows us in the past few days, it started to grow unlike what it happens to the global market. This is an indication that they are not bonded to each other and crypto is different and has its own economic system.

Therefore, we can't conclude but we can assume that it's because of that.

It is independent but we can't ignore the fact that when stocks fell, bitcoin followed or vice versa. That's why this assumption that we have of thinking that there's correlation between the two has been made. And this is why op made the thread because bitcoin seems moving up.

Major economic changes are always same for most of the investments, that's what I said too. Check the bold part of my post. It is common for stock or gold or crypto. By the way, BTC had recovered its most current drop.

You are wrong, bitcoin can recover and has recovered faster than any other investments. If economy gets better position, bitcoin will recover fast although it has already.

While stocks are losing, bitcoin has risen in price again. This is not at all surprising.