{"id":34463,"date":"2023-07-12T02:31:56","date_gmt":"2023-07-12T06:31:56","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/bitcoin-finally-decoupled-from-u-s-stocks-heres-why-it-matters\/"},"modified":"2023-07-12T02:31:58","modified_gmt":"2023-07-12T06:31:58","slug":"bitcoin-finally-decoupled-from-u-s-stocks-heres-why-it-matters","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=34463","title":{"rendered":"Bitcoin finally decoupled from U.S. stocks. Here\u2019s why it matters"},"content":{"rendered":"
\n

For more than two years, bitcoin and stocks often traded in tandem with each other but maybe no longer. \u00a0<\/p>\n

The correlation between bitcoin
\n BTCUSD,
\n +0.54%<\/bg-quote>
\n and the S&P 500 index
\n SPX,
\n +0.67%<\/bg-quote>
\n has fallen to close to zero, according to a Tuesday note by Dan Morehead, founder and managing partner at Pantera Capital.\u00a0<\/p>\n

\n

For most of cryptocurrencies\u2019 history, the assets were not correlated with U.S. stocks, noted Morehead. During the first nine years of the existence of bitcoin, which was created in 2009, correlation between the crypto and the S&P 500 was 0.03. <\/p>\n

<\/p>\n
<\/p>\n
<\/div>\n<\/figure><\/div>\n

However, the correlation between the two assets started to rise starting 2020, and peaked at 0.76 in May last year. <\/p>\n

Part of the reasons was market participation from \u201call of the excessively-leveraged centralized entities,\u201d according to Morehead.\u00a0<\/p>\n

A fall in the correlation between bitcoin and stocks is bullish for crypto assets, noted Morehead. \u201cWhen you find a new asset class with incredibly high historical returns and essentially no correlation with typical assets \u2013 that\u2019s the dream investment.\u201d<\/p>\n

\u201cAs blockchain is in no way connected to interest rates, it should have a very low correlation to the main asset classes (stocks, bonds, real estate), which are all tightly driven by rates,\u201d wrote Morehead.\u00a0<\/p>\n

Bitcoin has rallied over 80% so far this year, after posting an over 60% decline last year, according to CoinDesk data. The S&P 500 rallied 15% year-to-date, while the index lost over 18% in 2022, according to FactSet data. <\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

For more than two years, bitcoin and stocks often traded in tandem with each other but maybe no longer. \u00a0 The correlation between bitcoin BTCUSD, +0.54% and the S&P 500 index SPX, +0.67% has fallen to close to zero, according to a Tuesday note by Dan Morehead, founder and managing partner at Pantera Capital.\u00a0 For […]<\/p>\n","protected":false},"author":1,"featured_media":34464,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-34463","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nBitcoin finally decoupled from U.S. stocks. 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