Nasdaq turns out to be the most correlated asset with BTC this year

[Xangle]

Here is an interesting report written by crypto disclosure platform Xangle.

https://s3.ap-northeast-2.amazonaws.com/upload.xangle.io/files/weekly+just+the+facts/200316/(Xangle)200316_EN_C.pdf

The report shows that Nasdaq turned out to be the most correlated asset with BTC this year, with 56.43% determination. This figure, however, decreases significantly to 8.24% when we stretch the period to 2018, showing that the determination between Nasdaq and BTC can change drastically under different circumstances.

Determination comes from R-squared, the goodness-of-fit measure for linear regression models. Put simply, it is a measure of how correlated, or how much variability of one factor can be caused or explained by its relationship with another factor.

-The determination between Bitcoin & other traditional assets (2020):
Nasdaq 56.43% / S&P 40.59% / Nikkei 18.2% / Silver 15.63% / Kospi 10.86% / US 2yr bond yield 7.42% / US 10yr bond yield 2.37% / Gold 2.13% / WTI 1.14%

-The determination between Bitcoin & other traditional assets (2018~present)
Gold 21.65% / S&P 11.97%/ Nasdaq 8.24%

-The determination between Bitcoin & other traditional assets (2013~present)
S&P 71.34% / Nasdaq 71.18% / Gold 26.6%


Please tell me your thoughts! Thanks

[NeuroticFish]

Please tell me your thoughts!

I've seen something interesting in Bitcoin history: as soon as somebody finds a correlation between Bitcoin price movement and something else's price movement (usually stocks, indeed), the market decides to prove it wrong.
Even if some such movements are in sync sometimes, that happens for short periods of time, which proves nothing.
You also started with "this year". It's a good direction for facing the truth 

[squatter]

I've seen something interesting in Bitcoin history: as soon as somebody finds a correlation between Bitcoin price movement and something else's price movement (usually stocks, indeed), the market decides to prove it wrong.

I was at a dinner party recently and Bitcoin came up in the context of markets and the economy. Someone shared their theory that cryptocurrency markets were part of the overarching tech bubble that's been developing since the last financial crisis, as reflected by the Nasdaq.

I didn't think much of the connection at the time, but I'm certainly considering it now.

[The Sceptical Chymist]

I was at a dinner party recently and Bitcoin came up in the context of markets and the economy. Someone shared their theory that cryptocurrency markets were part of the overarching tech bubble that's been developing since the last financial crisis, as reflected by the Nasdaq.

That's an interesting theory, not one I'd considered, though I'm not sure if it's true.  I'm also not sure what kind of tech bubble there is, because I vividly recall the internet stock bubble that popped in 2000 and this bull market that we've been in for stocks for the past 11 years doesn't seem to be centered around tech companies in particular. 

I remember thinking that we might have been in for version 2.0 when social media stocks started heating up, but I don't think those have been driving the market for years either.

Besides, as NeuroticFish has pointed out bitcoin hasn't been correlated strongly with the stock market for any significant length of time anyway.  It's had booms and busts several times since 2009 whereas the stock market hadn't had even so much as a big correction until recently--at least none that I can recall.

[squatter]

I was at a dinner party recently and Bitcoin came up in the context of markets and the economy. Someone shared their theory that cryptocurrency markets were part of the overarching tech bubble that's been developing since the last financial crisis, as reflected by the Nasdaq.

That's an interesting theory, not one I'd considered, though I'm not sure if it's true.  I'm also not sure what kind of tech bubble there is, because I vividly recall the internet stock bubble that popped in 2000 and this bull market that we've been in for stocks for the past 11 years doesn't seem to be centered around tech companies in particular.

The top Nasdaq companies are Apple, Microsoft, Amazon, Google, Facebook, Intel, etc. The list continues. I'm not saying that it was only tech companies that boomed, just that there has been a tech bubble, and that Bitcoin may have been riding its coattails to some extent. The 1990s boom wasn't completely tech driven either -- the dotcom bubble was just the climax of it all.

Besides, as NeuroticFish has pointed out bitcoin hasn't been correlated strongly with the stock market for any significant length of time anyway.  It's had booms and busts several times since 2009 whereas the stock market hadn't had even so much as a big correction until recently--at least none that I can recall.

Bitcoin has only existed during a period of economic prosperity. It has never been through an economic crash. That's what this theory is about, more so than temporary asset correlations.