Bitcoin has been acting unusually similar to the stock market

[bbc.reporter]

Is this the end of the age of the HODL and the to the moon like what most of us love to say? I reckon yes, and I do not like it. The increasing correlation of the cryptospace with the stock market would only mean that the end of bitcoin as we know it is almost at hand.

The Federal Reserve has already been doing rate hikes and as we already know, it has a negative correlation with the growth of the Stock market. Pair that with the increasing correlation of bitcoin and the S&P500, I would not be expecting it to be a profitable year for cryptocoin trading.



“We can see that bitcoin’s correlation to the broader market has in fact increased, but the current level of correlation still stands below previous periods in the past 14 months,” Morgan Stanley wrote in a note to clients, referring to how the correlation touched 0.35 last June. “Looking at the overall trend during that period, it is clear that correlation with the broader equity market has not been fully established in the data.”

The investment bank speculated that increased institutionalization of the bitcoin market — for example, the rising number of hedge funds dedicated to cryptocurrencies — “may have opened a path to increased correlation,” as it is no longer small retail investors driving the action.

Read the whole article https://www.marketwatch.com/story/bitcoin-has-been-acting-unusually-similar-to-the-stock-market-2018-02-07

[rlim475]

Looking at that graph the average over the last year or so which it covers seems to be about zero. It seems that you might be drawing conclusions from nothing.

[magneto]

So what. Bitcoin is bitcoin and stocks are stocks.

They are too fundamentally different things. It's easy to see why this may even be true at the moment, though. Because people are seeing bitcoin and stocks as short and medium term investments at the moment.

There are still long term holders that are holding bitcoin for when the SHTF or to preserve their wealth.

I don't care how much correlation BTC has to the stock markets, as long as it is bitcoin, I'm holding it. Bitcoin won't suffer in an economic collapse scenario(in fact it may even benefit), but stocks will.

[hase0278]

So what. Bitcoin is bitcoin and stocks are stocks.

They are too fundamentally different things. It's easy to see why this may even be true at the moment, though. Because people are seeing bitcoin and stocks as short and medium term investments at the moment.

There are still long term holders that are holding bitcoin for when the SHTF or to preserve their wealth.

I don't care how much correlation BTC has to the stock markets, as long as it is bitcoin, I'm holding it. Bitcoin won't suffer in an economic collapse scenario(in fact it may even benefit), but stocks will.

You are right since Bitcoin is independent on an economy of a country but for now they are becoming fundamentally similar things. Like what stock holders want when they hodl it, Bitcoin hodlers(most of them) are in it for the profit and believes that it will go up more. For now, I think there are no correlations between the two on price but if you will correlate it in one way or another, there will be correlations(s).

[omonuyak]

Is this the end of the age of the HODL and the to the moon like what most of us love to say? I reckon yes, and I do not like it. The increasing correlation of the cryptospace with the stock market would only mean that the end of bitcoin as we know it is almost at hand.

The Federal Reserve has already been doing rate hikes and as we already know, it has a negative correlation with the growth of the Stock market. Pair that with the increasing correlation of bitcoin and the S&P500, I would not be expecting it to be a profitable year for cryptocoin trading.



“We can see that bitcoin’s correlation to the broader market has in fact increased, but the current level of correlation still stands below previous periods in the past 14 months,” Morgan Stanley wrote in a note to clients, referring to how the correlation touched 0.35 last June. “Looking at the overall trend during that period, it is clear that correlation with the broader equity market has not been fully established in the data.”

The investment bank speculated that increased institutionalization of the bitcoin market — for example, the rising number of hedge funds dedicated to cryptocurrencies — “may have opened a path to increased correlation,” as it is no longer small retail investors driving the action.

Read the whole article https://www.marketwatch.com/story/bitcoin-has-been-acting-unusually-similar-to-the-stock-market-2018-02-07

How many times shall we have end of bitcoin and cryptocurrencies in general? I think we should not think that bitcoin can be controlled by any governments now because it is decentralized. Bitcoin as we know has a patterns that it has been following and this pattern is going to be repeated several time and we would have the corrections resolve like other one and bitcoin is going to resume it bullish trend again.

[YuginKadoya]

Who said that hodling is finish and where did you get that idea? Even though we are not having a bull run movement over the value doesn't mean that it is already finish, It is only acting unusual but it will never be the end for bitcoin these kind of though is very bad in the community in giving us Fear doubt and uncertainty, And right now I think that the value is still in a great spot.

[rayk]

Bitcoin is affected by stock market I agree but bitcoin is different than stocks, but if stock markets rise well, then bitcoin rise as as well. Prices actually in the long term not correlated.

[tdrinker]

Looking at that graph the average over the last year or so which it covers seems to be about zero. It seems that you might be drawing conclusions from nothing.

This is exactly what I saw. A little spike in the last months towards a positive correlation but over the span of the year it mostly fluctuates around zero.

If it was holding significantly positive over an extended period then we could start to draw conclusions and look to the performance or indicators of one for signs on how the other will perform but I don't think we can draw such a conclusion just yet.

[BitHodler]

Bitcoin is affected by stock market I agree but bitcoin is different than stocks, but if stock markets rise well, then bitcoin rise as as well. Prices actually in the long term not correlated.

Bitcoin isn't affected by stocks at all, don't let a bunch of retards make you believe that. The thing is that Bitcoin's market is supply and demand based, and goes through similar stages the stock market goes through.

Once in a while you'll see certain aspects of the market *coincidentally* mimic each others pattern, but it doesn't say anything. If you look back at the past market performances, it should be clear by now.

Bitcoin will continue to break all traditional market standards, and that for many more years to come. However, at some point there will be a time where this market is no longer the market it is today.

Bitcoin's market is still largely unregulated, which won't stay like this endlessly. Eventually I do expect a gold-like market scenario, but how and when this will happen remains to be seen ~ regulations will do their work.

[uslfd]

To be more correct, bitcoin is negatively correlated with VIX which is loosely negatively correlated to the stock market.
So.... your theory is right-ish. However if you think carefully you'd know we're bound to see a huge stock market crash in the coming year but central banks will react by printing even more money which will push VIX to new lows for a long period of time - meaning bitcoin would fly.