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  • Bitcoin’s Correlation With U.S. Stocks Has Cracked: BTC and Gold May Be In The Same Basket
Bitcoin's Correlation With U.S. Stocks Has Cracked: BTC and Gold May Be In The Same Basket - Binaryx

Bitcoin’s Correlation With U.S. Stocks Has Cracked: BTC and Gold May Be In The Same Basket

The first steps towards restoring the economy from the negative consequences of the spread of Covid-19 indirectly affected the market condition of Bitcoin. After a stable movement of the Bitcoin rate up for the first time in the last week, a price decline of 1.50% per day was recorded. The flagship cryptocurrency began to move in the opposite direction after reaching the mark of $7,810 and today it is trading at $7,677.

The driver for lowering the price of Bitcoin was the increase in shares on the US stock exchanges, which was caused by the weakening of the restrictions adopted due to Covid-19. In March 2020, the correlation of Bitcoin with the US dollar was as close as possible. This was largely due to the presence of a common problem, namely, a sharp drop in the price of these assets due to the spread of the pandemic. Today, the correlation of Bitcoin with the S&P 500 stock indicator has shown the first signs of a discrepancy.

Bitcoin and Gold correlation

Against the backdrop of rising stocks, Bitcoin began to restore correlation with Gold. Today, Gold is in a precarious state and, along with the flagship cryptocurrency, has also begun to move down. The price of Gold fell to $1,700 an ounce. Analysts believe that while Gold is not ready for recovery and the “green zone” is not expected shortly.

The weakening of the economic blockade, the introduction of measures aimed at the smooth restoration of the life of the United States can perfectly play in favor of stocks. It is expected that in these conditions, investors will redirect their capital to stock exchanges. Thus, Gold and Bitcoin will be on an equal footing. Analysts are in a hurry to reassure the crypto community: stock increase will not be able to provoke a sharp move down the price of BTC, but it can slow down the bulls.

Mike McGlown, the spokesman for Bloomberg, gave optimistic predictions of cryptocurrency. He noted:

“Although 2020 was not easy for all financial markets, Bitcoin was able to prove its viability. While oil prices are breaking records, Bitcoin is showing resilience. Bitcoin and Gold are expected to continue to increase. ”

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What to expect next?

After the collapse in March, the price of Bitcoin was able to recover by more than 100%. Analysts also predict a further rise in the flagship cryptocurrency to $8,000. Based on this positive trend, investors can use Bitcoin to make a profit. If the shares fall, they will direct the profit received from Bitcoin and Gold to “closing holes” on the stock exchanges. Thus, this will be another step for enhancing the correlation of Bitcoin with Gold.