Crypto - and traditional markets KW3 – Bitcoin correlates hardly at the market

the anti-correlation to all considered asset is decreased again. Currently Bitcoin is coupled with the rest of the market. But the Performance, fell back on the amount of the other Assets.

Dr. Philipp Giese
20. January 2019BTC$3.531,01 -4.41%part Facebook Twitter LinkedIn xing mail

What good is Bitcoin and the strongly correlated crypto market as a random Asset? Decoupled from the traditional markets from the crypto-market? And how strong the volatility is bitcoin?

The size of the correlation and volatility are just for institutional investors: A low correlation with traditional markets such as the S&P500, the DAX or the Dow Jones would confirm that the crypto-market for institutional investors could be interesting. It would be for a greater diversification of the portfolio is helpful. Another Monitor, the volatility is high volatility and the associated risk scare off institutional investors.

Since the beginning of November, we keep track of how Bitcoin fails in comparison to traditional markets. We, therefore, pay attention to the correlation in the last month, on a sliding correlation of a continuous volatility and a sliding Performance. The last three values are calculated for each day based on the last 30 days. Since the correlations within the crypto market behavior very similar to BTC for institutional investors, is currently the most interesting, we focus mostly on the Bitcoin price.

After the price fall of 10. January, the crypto-currencies have been moving sideways. For the correlations of the Top 3 crypto currencies, this means that the coupling is still strong, even if the coupling between Ethereum and Bitcoin in the last month fell:

this development should not be overestimated. The current decoupling is justified by the flight of Ethereums the end of December. For a really long-term decoupling is nothing to be said currently.

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correlation: crypto-currencies vs. traditional market

Bitcoins correlation to the classical values has changed since last week. The coupling to Oil is strongly negative. Similarly, via the coupling to the American indices S&P 500 and Dow Jones say that while Bitcoin is decoupled to the DAX and Gold almost completely. Overall, the correlation is to all of the Assets currently negative:

these negative pairings, the mean correlation among all of the observed markets for Bitcoin has by far the smallest.

As you can see from the table above, is correlated to Bitcoin to all of the comparison assets is negative. The coupling of Gold and the DAX are at their weakest:

Bitcoins Performance falls on a normal market level

Despite the sell-off of 10. January, the monthly volatility of a little over 0.04 per cent and since the beginning of 2019 is quite stable at this Level:

Thus, the volatility could remain, of course, significantly higher than that of the comparison assets, which is not surprising. But it is fallen and remains at this Level. Thus it represents, at the least, an uncertain level of safety, with which an Investor can expect.

Unfortunately, Bitcoin had to give up his Top Position in terms of Performance. Currently, Oil Futures are able to claim with an average daily Performance of 0.4 percent. Bitcoin, by contrast, fell almost to zero:

Read also: Bitcoin vs. Ripple (XRP) – A fight with hard bandages

Although Bitcoin is no longer as attractive as in the last week, but have still a low correlation to the market, as well as a stable volatility. So Bitcoin is also in this week is still an attractive investment for institutional investors.

data on the Basis of cryptocompare.com, finance.yahoo.com and fred.stlouisfed.org