Crypto - and traditional markets KW47 – Separate ways for Bitcoin and XRP?

the The volatility of Bitcoin continues to rise. Interestingly – though not with the same level – the same thing about Oil to say. With the price collapse of last week to decouple XRP and Bitcoin.

Dr. Philipp Giese
26. November 2018 share 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 sizes of the correlation and volatility for institutional investors interesting: 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 deters institutional investors.

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

of The 14. November commenced sale on the crypto-market. The volatility is also back. What is striking, however, is that XRP would not join the dance movements of Bitcoins, which led to a decoupling of the two courses:

correlation: crypto-currencies vs. traditional market

Whether sales or not, the classic image of the correlation matrix has changed this time. Bitcoin is in addition to Oil and Gold the least correlated Asset. Currently, only Oil is still uncorrelated, while the Gold market is correlated to Gold easily anti:

A glance at the current monthly correlations between Bitcoin and traditional markets shows the rate of fall in the middle of November very clearly. In the short term, the correlations changed significantly. While the correlation between Bitcoin and the indices S&P 500, the DAX and the Dow Jones could slightly under 0.2, the Oil into the Negative, but this week again the level of the correlations to the S&P 500, the DAX and the Dow Jones connect. The strongest from each other, Bitcoin and Gold are decoupled. These two Assets are even correlated to slightly anti:

Bitcoins volatility: as high as since a Long time!

Of course, the fall of 14. November was not only an end to the Sideways trend, but also an end to the decline in volatility. Meanwhile, the monthly volatility has increased again to a Level that you saw last time in mid-August. The volatility of Oil Futures, although it is far behind the Bitcoin, is also on the Rise, also since August. The rest of the considered Assets is to be stable:

Currently, the case invites the end of the crypto-market is rather little to large Investments. Nevertheless, the decoupling is to the traditional markets attractive. Thus, if the expected ground is found, it may be possible that crypto-Assets, and in particular Bitcoin, is for traditional investors to get interesting again.