Crypto - and traditional markets – bitcoin bull market classic market in the shadow

the Bitcoins uptrend that led to the Performance from the Bitcoin price is significantly higher than that of the comparison assets. The volatility has fallen sharply, as well as the correlation to traditional markets low.

Dr. Philipp Giese
13. May 2019BTC$7.746,00 11.20%part Facebook Twitter LinkedIn xing mail

Since the beginning of November, we keep track of how Bitcoin fails in comparison to traditional markets. This is not a trivial comparison of the Performance. Institutional investors are interested in Bitcoins claim to be a non-correlated, stable Asset, extremely. In a guest contribution on the €uro Fund research dedicated to BTC-ECHO the question of whether Bitcoin and the strongly correlated crypto market would be a good addition to classic portfolio. This question is the institutional investors in the crypto-market is interested in, less of a hope of a new Bull Run like the end of 2017. to clarify

the Suitability of classical Portfolios can be considered an Investor in various sizes. For one, it would be interesting to see whether and how much Bitcoin is linked to traditional markets. On the other, a stable Asset for a long-term Investment is attractive. The volatility of the asset do not need to be extremely low. You should have at least over a longer period of time, a certain degree of stability.

We pay attention in this series of articles, therefore 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. As a comparison, assets in traditional markets, we consider indices S&P 500, Nikkei and Dax, as well as Oil and Gold.

How to develop the relationship between Bitcoin and the traditional markets?

The correlations of the crypto-currencies have continued to fall. The background is that Ethereum and Ripple have not been able to join in the Bull Run of Bitcoin:

We will, as always, on Bitcoin focus.

correlation: crypto-currencies vs. traditional market

The correlations between the Bitcoin exchange rate and Oil as well as the indices, the DAX and the S&P 500 are positive. Between the DAX and Bitcoin, the coupling is, however, currently quite small. A little, these positive correlations are compensated by the negative coupling with the Nikkei Index and with Gold:

The coupling between Bitcoin and almost all of the comparison assets fell in the last week. The only exception to this is the correlation to Gold:

Overall, the absolute mean correlation Bitcoins with other markets at 30 percent. Thus, it is less than the absolute correlation of the other comparison assets. Taking into account the compensation effects due to any of the anti-correlations, a different picture emerges. Although Bitcoins coupling is to the rest of the markets only 18 per cent, but the middle pairings to the other markets, Gold (eight per cent) and Nikkei Index (five per cent) are significantly lower.

How long can hold on Bitcoin is still on the classic market?

The rate of explosion of 2. April reflected, of course, on the volatility. Since the rate of development since then has been mostly positive, great price explosions but failed, fell back to the volatility. Since the beginning of may it is moving in a stable a little over two percent of:

Since the collapse of the mean daily Performance in the last week of may this hold for Bitcoin remains at approximately 0.5 percent. This is significantly above the daily average of the Performances of the remaining Assets, which move around the Zero. The Performance of the Oil is most like: she Was at the end of April at approximately 0.4 percent, is slipped into the Negative:

According to Bitcoin, also taking into account the Sell-Offs, the best-performing Asset:

Bitcoin house high above the Rest of the market

looking at the cumulative Performance since the beginning of the year, could Bitcoin head-to-head race against Oil profits. The rally of the last few days raised Bitcoin of the comparison assets. Even Oil, the cumulative Performance since beginning of the year, significantly higher than the rest of the Assets can only have a half as high. The three stock market indices S&P 500, Nikkei, and DAK is far behind in third place, while the cumulative Performance of Gold continues its dance around the zero line:

Bitcoin presents itself, in spite of all the currently existing Red Flags in the crypto-Ecosystem, as an interesting Investment for institutional investors. Specifically, the currently extremely good Performance will surely make for increased interest in Bitcoins the new Asset. The still manageable volatility, as well as the independence of the traditional markets will be the Narrative of the non-correlated Assets to another fire.

data on 10. In may of cryptocompare.com, finance.yahoo.com and fred.stlouisfed.org used.

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