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Bitcoin’s correlation with U.S. stocks deepens…both weaken as volatility rises

Source

Uk Jin

Summary

The 30-day correlation coefficient between Bitcoin (BTC) and U.S. stocks, the S&P 500, hit 0.74, the highest level so far this year.
During the recent U.S. and Israeli airstrikes on Iran, Bitcoin and U.S. stocks weakened simultaneously.
Some observers noted that despite Bitcoin being positioned as an alternative to the traditional financial system, it has been moving similarly to risk assets and its correlation has increased.

Forecast Trend Report by Period

Bitcoin (BTC) has recently shown a sharply stronger correlation with the U.S. stock market.

According to Bloomberg on the 7th (Korea time), the 30-day correlation coefficient between Bitcoin and the S&P 500 reached 0.74, the highest level so far this year. The correlation coefficient measures how closely the prices of two assets move together; the closer it is to 1, the stronger the co-movement.

In fact, when the United States and Israel carried out airstrikes on Iran recently, both Bitcoin and U.S. equities fell at the same time.

Some observers say that despite Bitcoin’s role as an alternative asset to the traditional financial system, it has been moving much like a risk asset. Athanasios Psarofagis, an exchange-traded fund (ETF) analyst at Bloomberg Intelligence, said, “When volatility increases, Bitcoin and equities should move in opposite directions, but instead their correlation has risen.”

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