Theory: The Stock Market has Synchronized with Bitcoin

[notbatman]

I theorize that the stock market has synchronized with Bitcoin and that it will crash often during regular BTC dips from now on. Perhaps I have this backwards too. 

[Deeyoh]

Been watching the DOW and the ups/downs are almost perfectly sync'd with the price action on Bitfinex.   Strange indeed.  Guess those hedge funds really have a big impact on price.

[PartyPete]

I theorize that the stock market has synchronized with Bitcoin and that it will crash often during regular BTC dips from now on. Perhaps I have this backwards too. 

They do have correlation since most of the people who invest on stock market do invest in cryptocurrencies too. Especially, since the sell off this February almost all of the stock market has a loss of 3% and bitcoin drops to 6k usd. As I see it, the crypto market has always been tied to the stock market one way or another.

[faatipoke]

Yes it is interesting to see that stock market behave parallel with bitcoin. I think both of them have an opposite correlation with value of fiat money US dollars. US dollar is making a dip which is making all other instruments such as metals, commodities, other currencies, stock exchanges and cryptocurrencies. however I think that onve US dollar gains strength all will start decrease more than we had lastly

[Nosk]

I just watched the two curves and, even setting btc in logarithmic scale, it doesn't look correlated at all beside the simultaneous crash.
I have one small theory though about the simultaneous crash :
Some people must have both stock market values and bitcoins. It seems possible to me that some sold btc to buy stock marckets values back and others sold stock marckets values to buy btc back. As people in high finance tends to know each other a little, the start of the crash may be btc future related.

[Crytptohack]

Aside from the recent correction in both BTC and conventional US markets, I do not foresee a correlation. BTC just happened to be in a downtrend since hitting the peak last Dec and the US market had a 1 wk selloff for about 10%. The BTC selloff was ~70% (Based on the low from July 2017)

I think the sentiment, fundamentals and the technicals for both markets are way too different for them to be correlated. (IMO)

[eminemcookie]

It seems inevitable there will be a connection and that will only grow stronger in time as cryptos become further adopted, let's not forget that they are both forms of investment and so will suffer in the same ways when investment falls.

[The Sceptical Chymist]

It may seem like this is what's happening, but my own thought is that interest rates are about to rise, which is going to put an ass pinch on traders in crypto and stocks alike.  All this cheap money has inflated both markets significantly, and that might be coming to an end.  I don't think bitcoin and stocks are naturally correlated, in other words.   

I am finding it interesting that precious metals haven't gone up more than they have.  Might be a great time to buy some gold.

[NeuroticFish]

I think the sentiment, fundamentals and the technicals for both markets are way too different for them to be correlated. (IMO)

There are still moments when the whales have to cash out big. And then they may get out, in sync, from stock market and crypto market too, probably crypto a bit earlier than stocks because of trust / habit.
So I expect that even if the sync is not visible yet, it has a good chance to actually happen.

[UnDerDoG81]

Is there not a speculation going on that says that the govs plan to crash to whole economy/stocks in the near future, then blame it on cryptos and forbid them?

[btcone111]

It is indeed correlated now.
There has been a report saying that bitcoin is highly negatively correlated to the VIX

[afbitcoins]

If they are becoming correlated Im not keen on the idea but everything is connected and perhaps there are connections that are growing in the near and short term. eg people who invest in futures markets will not be the same types of people that were buying and hodling bitcoin when it was a nerd project.

My first reaction to the thread title was to think that no way are they correlated. In large scale terms I think that is still the case. The stock market is huge and on a decades long bull run but there are signs this is coming to an end with the end of the bubble in the bond markets and inescapable reality of inflation of prices in fiat. The chickens will come home to roost after all the zero interest rates and QE bullshit that the central gangsters have been doing.

Meanwhile bitcoin is a new asset class, sprung from nowhere, literally, who is Satoshi Nakamoto? And with the whole crypto space still relatively  small? And the potential disruption to financial markets that we are still only seeing the very early stages of. With huge room for further growth.

I think the correlation might be inverse that the stock market plunges while crypto grows. Or maybe better no correlation.