[Analysis] "Is Bitcoin's decline a leading signal for the stock market? Insufficient evidence"
Minseung Kang
Summary
- Eric Balchunas, a Bloomberg ETF analyst, said there is insufficient empirical evidence for the notion that a Bitcoin correction predicts a decline in the U.S. stock market.
- He presented a chart comparing monthly flows of the SPDR S&P500 ETF (SPY), along with data that the S&P500 index rose with a 62% probability after Bitcoin declines.
- He emphasized there is no need to overinterpret short-term correlations between Bitcoin and the stock market.
Regarding the notion that a Bitcoin (BTC) correction signals a decline in the U.S. stock market, Eric Balchunas, a Bloomberg ETF analyst, said there is "insufficient empirical evidence."
On the 19th, Balchunas said on X (formerly Twitter), "The idea that U.S. stocks necessarily follow after a month when Bitcoin falls is not accurate," and "After months when Bitcoin fell, the S&P500 rose with a 62% probability."
He presented a chart comparing monthly flows of the SPDR S&P500 ETF (SPY). He explained, "Even during periods when Bitcoin and stocks fell together, the S&P500 has consistently shown strong resilience." He pointed out there is no need to overinterpret short-term correlations between Bitcoin and the stock market.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
