If Bitcoin is safe-haven, why mirror the price movement of the U.S stocks?

[The Sceptical Chymist]

If you start giving people free money and or lend it to them at extremely low interest rates, and you'll start seeing asset classes correlate in their movements, regardless of what they are.  That's my layman's opinion about what OP's brought up here.  I don't think gold and bitcoin have a strong, long-term connection.  What that graph shows is a short-term correlation of two assets caused by macroeconomic conditions (as far as I can tell).

Bitcoin is certainly NOT a safe-haven asset.  Gold?  I guess it's as safe as any speculative asset can be, though there's still no guarantee that it's going to preserve any given person's wealth, as it depends on what price you got in at.  Anyway, that's a debate which has been done to death IMO.

[1714700972]

1714700972

[1714700972]

1714700972

[1714700972]

1714700972

[The Cryptovator]

Honestly Bitcoin itself doesn't have enough power to follow any trends. Its totally depends on investors & community since its backed by them. So if you notice some similarities on stock market chart and bitcoin chart it's just a coincidence IMO. I believe investors aren't limited to any single platform like bitcoin or stock markets. So probably when you notice similarities then likely it's a investors influence. For example when stock market went down then an investor become panic, perhaps same investors invested on bitcoin as well, so this investor would sell his bitcoin as well due to panic. That's how sometimes stock market & bitcoin market pattern would be same. This theory applicable when orttern become same during bump as well.

Note; Those users replying on main (full) thread then they shouldn't quote full thread. For example here is some users quoted full thread even on first reply. It will discourage readers to read your post. If you want to reply on a specific sentence then its fine to quote only that part instead of quote full thread.

[Shasha80]

Actually Bitcoin cannot be said of safe-haven, because investing in Bitcoin is very risky with its volatile prices. And since Bitcoin was not
created as an initial asset, Satoshi Nakamoto wanted Bitcoin to be payment as if it were fiat. In my opinion, the movement of Bitcoin is not
like US Stock, although it looks the same as just a coincidence and happens in the short term. Then for now Gold is more worthy of being
called a safe-haven.

[ChiBitCTy]

It is true that bitcoin has certainly seemed to mirror the stock markets ups and downs quite a bit over the past several months. That doesn't necessarily mean it's 100% mirroring the stock market nor if it would continue to mirror it in an extended crash. I think at some point it would stop correlating.

[cryptoboy007]

Actually Bitcoin cannot be said of safe-haven, because investing in Bitcoin is very risky with its volatile prices. And since Bitcoin was not
created as an initial asset, Satoshi Nakamoto wanted Bitcoin to be payment as if it were fiat. In my opinion, the movement of Bitcoin is not
like US Stock, although it looks the same as just a coincidence and happens in the short term. Then for now Gold is more worthy of being
called a safe-haven.

Then it looks like analysts that are positioning Bitcoin as a safe haven asset are also getting it wrong. I don't understand why everyone is saying Bitcoin isn't correlated with the S&P 500. Take a look at this piece, Bitcoin’s Price Correlation With S&P 500 Hits Record Highs.

[kawetsriyanto]

In this case, is there any relation to the length of time for an investment to become a safe-haven asset? Because basically, Bitcoin is decentralized. price is very determined by the market. We cannot control the price. In this case, if the investment is done in the short term, there is a possibility that the price will suddenly change drastically. and we might actually experience a loss. however, if used for long-term investment, the value of BTC will continue to rise until it reaches ATH again within a period of several years.

[Savemore]

It is really a big mistake if you will treat bitcoin as a safe haven asset because at the first-place bitcoin is so volatile and it already broken one of the characteristics of being a safe haven where its price is stable. There is also no correlation between the price of the bitcoin and the U.S. stocks. IF you will observe the price of the bitcoin today, it is going sideways why some of the U.S. indices are in uptrend and making all time high and 52 weeks highs.

[Fundamentals Of]

There are two false assumptions here:

One, that Bitcoin is a safe-haven.
Two, that Bitcoin is mirroring the US stocks in terms of price.

Better check the basics and both of their figures once again. They will argue against the above-mentioned assumptions.

[cryptoboy007]

I think all those things are quite unnecessary. Assets can't be a safe haven all the time. There are times that cash can be a better option as a safe haven, and sometimes gold is a good option to go with. There are times you will check and a particular asset will be doing fine while the majority in the market are falling. You can decide to buy that particular asset so you will be able to save your money and not lose it.

So in this case of cryptocurrency/bitcoin, I don't think it's necessary creating what you have referred to as S&P 500. Cryptocurrency is different, and it doesn't correlate with stocks just as you have said, sometimes when it does it's just a coincidence. They don't correlate in any way, neither does it correlate with gold. The only thing bitcoin correlates with its same cryptocurrencies such as Ethereum.

I think it's very necessary you understand the point from which I'm heading from, cryptocurrency fundamentals is quite different from stocks. But it clearly looks like the market sentiment is beginning to mirror each other.

[lumeire]

I think all those things are quite unnecessary. Assets can't be a safe haven all the time. There are times that cash can be a better option as a safe haven, and sometimes gold is a good option to go with. There are times you will check and a particular asset will be doing fine while the majority in the market are falling. You can decide to buy that particular asset so you will be able to save your money and not lose it.

So in this case of cryptocurrency/bitcoin, I don't think it's necessary creating what you have referred to as S&P 500. Cryptocurrency is different, and it doesn't correlate with stocks just as you have said, sometimes when it does it's just a coincidence. They don't correlate in any way, neither does it correlate with gold. The only thing bitcoin correlates with its same cryptocurrencies such as Ethereum.

I think it's very necessary you understand the point from which I'm heading from, cryptocurrency fundamentals is quite different from stocks. But it clearly looks like the market sentiment is beginning to mirror each other.

There can be times when they mirror each other but in reality they are completely different from each other and bitcoin don't follow The stock market. In the past also there used to be a reverse trend between these two, when the stock market used to fall bitcoin rose in price and when former rose the latter fell, this is just a speculations all the time, the market sentiments changes and a lot of factors make the Price rise or fall we can only try and find these relations and still bitcoins will be unpredictable.

[cryptoboy007]

It is really a big mistake if you will treat bitcoin as a safe haven asset because at the first-place bitcoin is so volatile and it already broken one of the characteristics of being a safe haven where its price is stable. There is also no correlation between the price of the bitcoin and the U.S. stocks. IF you will observe the price of the bitcoin today, it is going sideways why some of the U.S. indices are in uptrend and making all time high and 52 weeks highs.

I think Bitcoin decoupled its correlation with the US stock just before the halving, the halving effect on the price of the asset. Check last year and the first quarter of 2020, both assets were correlative.

[davis196]

A "safe heaven" is a financial asset that is considered stable and not risky.Gold is the only safe heaven asset,because the demand for gold will last forever and people will always consider gold as something valuable.
Bitcoin is not a safe heaven NOW,because the BTC market price is too volatile and such investment into bTC is too risky.
The important thing is that Bitcoin MIGHT become a safe heaven asset in the future,as Bitcoin adoption grows faster across the globe.

[larus]

Bitcoin is not safe haven, thats simple answer. With price flactuation like in last year how it could be safe?

[Sanugarid]

There are two false assumptions here:

One, that Bitcoin is a safe-haven.

I don't how other people calling it safe-haven, is it because it already stayed in a tight price range? If that is the case then we there should be things to be considered as safe haven, not just bitcoin but also things that are unstable in prices. There are already lot of thread that talks about bitcoin as safe haven, I guess we should all look into a single thread coz there must be the answer there. I bet we all know, aren't we?

Two, that Bitcoin is mirroring the US stocks in terms of price.

A simple graph between crypto market and stock market would speak a lot. No need to prove such things.

Better check the basics and both of their figures once again. They will argue against the above-mentioned assumptions.

  A simple research would save us a lot of time, so please do it next time.

[DougM]

I think Bitcoin decoupled its correlation with the US stock just before the halving, the halving effect on the price of the asset. Check last year and the first quarter of 2020, both assets were correlative.

Interesting thread!  I had wondered/worried about the BTC/Stock market correlation myself. IMHO the financial markets had a majorcrash in response to the worldwide COVID crisis and unfortunately BTC followed along for the ride. I was hoping that BTC would have stayed the course or even increased in value as money flowed out of the stock market seeking alternative investments that are less impacted by world economy crashing. However, that was not the case. Following the crash both BTC and the stock market recovered as panic was replaced by hope/optimism and the stock market has recovered considerably.  If you compare stock market since March to today it is hard to argue that there is some consistency in movements. However, 'correlation is not always causation' and as pointed out earlier by ETFbitcoin it could just be coincidence. This is also a very short time period. I personally believe the stock market has not fully priced in the long term impact of the COVID crisis and I expect to see another drop sometime this fall.  I am hoping, this time, that BTC does not follow suit.  Time will tell I guess...

Here is yet another Forbes article in May on this topic suggesting the stock market/BTC are trending in tandem since March timeframe: Bitcoin And Stocks’ Correlation Reveal A Secret. I do not buy in on the authors suggestion that BTC is a leading indicator for stocks, but he makes some other points worth considering.

[DevilSlayer]

There are two false assumptions here:

One, that Bitcoin is a safe-haven.

I don't how other people calling it safe-haven, is it because it already stayed in a tight price range? If that is the case then we there should be things to be considered as safe haven, not just bitcoin but also things that are unstable in prices. There are already lot of thread that talks about bitcoin as safe haven, I guess we should all look into a single thread coz there must be the answer there. I bet we all know, aren't we?

Two, that Bitcoin is mirroring the US stocks in terms of price.

A simple graph between crypto market and stock market would speak a lot. No need to prove such things.

Better check the basics and both of their figures once again. They will argue against the above-mentioned assumptions.

  A simple research would save us a lot of time, so please do it next time.

It is still a misconception if you treat bitcoin as a safe have investment, even though we are now in information age; it doesn't mean that the information available all over the internet is true and legit. If you will consider bitcoin as safe haven, be ready because it is so volatile. For those who do not know what it is, it is simply means that the investments have low risk and there is a high probability of winning.

I like to agree to you in terms of graph between crypto and stock market, it is true that there is no correlation between both market and we should not compare it because it is both different market. If you see that there is an article saying that the price of the bitcoin is really mirroring the stock market. Be careful because what he just say is not true and it can affect your decisions.

[conhela]

Graph aside, price movement are an indicator of market sentiment. If an asset is not deemed as a 'safe-haven' or whatever they call it, then the price will move accordingly. In short, if more and more people starts to believe that bitcoin (or any asset) is a good thing to store their wealth, sooner or later the price will follow. It's safe to say that if we don't see that yet, then the market still don't fully trust it even if the potential is there. Time will tell.

Isn't that one of the biggest gripes with crypto? That only time can tell many of the benefits touted over and over online? Not being critical of it, I agree though that the fact that current bitcoin price mirroring the stock market is mimicking people's sentiment rather than the US stock rate.