Bitcoin and traditional markets – Awakened Bitcoin in times of crisis?

The correlation of Bitcoin price with other markets is very low. Similarly, the volatility has fallen back slightly. Both are accompanied by an acceptable Performance Bitcoins.

Dr. Philipp Giese
11. August 2019BTC$11.401,00 -0.43%part Facebook Twitter LinkedIn xing mail

For over half a year, 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. In order to clarify the Suitability of classical Portfolios can be considered an Investor in various sizes:

the correlation between the Bitcoin price and the traditional markets nThe volatility and Performance the Bitcoin-course

We pay attention in this series of articles, therefore, on these three sizes. You will be charged for each day on the Basis of 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.

correlation: Bitcoin stands against the classical markets

Because within the Top 10 everything of Bitcoin-oriented and institutional investors look at current currencies in the first line on the biggest of all Crypto, we will look at the Top 10 crypto-currencies skip. Currencies something interesting – institutional interest or special features of the correlations within the Crypto – happen, we respond.

"Bitcoin against the Rest of the world" – so you could describe the current market situation. Bitcoin is correlated to all of the Assets anti. Only with Gold, it has a low coupling, all the other cases, the comparison of assets behave in an opposite way:

After a sharp Drop at the beginning of August, the correlations between the Bitcoin move current exchange rate and the Nikkei, the DAX or Gold is on the up again. The couplings between Bitcoin and the S&P 500 and Oil are moving in contrast, sideways:

Overall, the absolute mean correlation with the other markets, with 16 percent. Thus, the Bitcoin price has the lowest coupling to the comparison of assets in this market comparison. Taking into account compensation effects, the image of the past few weeks has been confirmed: a negative correlation of 16 per cent, the price of Bitcoin is significantly anti-correlated than Gold (-12 percent). All other Assets have to the market is a positive correlation.

Performance of Bitcoin is not still done at the level of the comparison assets

with Respect to the volatility, since the last week really. It is still about five percent, and well above the monthly volatility of the comparative assets:

you Could apply in relation to the volatility of means of technical analysis, one might interpret the movement of monthly volatility since the beginning of March 2019 as the oscillations in an upward channel:

The Performance of bitcoin has continued its slow rise, and I was on 5. August, again the best performing Asset. Currently, the Performance fell back again on the zero line and below the Performance of Gold:

Bitcoin is recovering, undoubtedly, again. We choose our viewing since the beginning of March 2018, would not have been Bitcoin the best Investment, argues, however, with the S&P 500 and Gold to this place:

This all looks not bad: Bitcoins correlation with the comparison of markets is low and also the Performance can increase. Yes, the volatility is still quite high, but it is a risk, which, however, is manageable. But macro-economically, the crypto market could play an interesting role. About Bitcoin as an Asset in times of crisis, we have written a few days ago. This view was recently carried out on Twitter in more detail:

A Currency Crisis?

When the long-term charts all start pointing to a single event risk, I pay attention.

When those charts are at the KEY level, I focus.

And when they break, it is time for action...

Something really BIG is going on...

Raoul Pal (@RaoulGMI) August 7, 2019

The entire Thread is recommended from a technical perspective, if something apocalyptic. Even if the economic situation is not as developed as it is presumed to be Raoul Paul, can you understand such a thinking, why Bitcoin is re-discovered as an interesting Investment for institutional investors.

data, unless otherwise specified, on 9. August cryptocompare.com, finance.yahoo.com and fred.stlouisfed.org used.

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