Nautilus Investment Research recently said stock prices tend to soar whenever bitcoin experiences explosive growth. Bitcoin’s price has trended upward about 80% this last month. The S&P 500 has seen monumental increases in lockstep with bitcoin. It appears that bitcoin prices are correlated with rise in stock prices. The Business Insider article said, “These kinds of astronomical gains in bitcoin, it turns out, are correlated with a strong showing by stocks too, according to Nautilus Investment Research.”
Nautilus Investment Research also detailed that whenever bitcoin gained 30% value in a month, various stocks increased in price a couple of months later.
Why is Bitcoin a Driver for Stock Prices?
There are not any clear indicators why bitcoin is a driver for the stock price. The correlation is unknown. There are some theories that rampant buzz and excitement from bitcoin traders also distributes the same energy to Wall Street. The Business Insider article provided a similar sentiment:
"When traders are going nuts about a highly-speculative investment like bitcoin, that same risk-loving attitude might turn up among the folks who trade stocks. What we can’t know from this is whether one affects the other, or if there’s something else driving strong demand for both"
The Business insider article mentioned the Nautilus Investment Research group only has 18 points of reference. This means their data research only looks at 18 variables in regards to bitcoin and stock price analysis. In all, it goes back to 2010, which was the early days of bitcoin.
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