Crypto - and traditional markets – Bitcoin Oil fails

the Bitcoins uptrend that led to the Performance from the Bitcoin price beating in the meantime also by Oil. The volatility has fallen sharply, while Bitcoin currently has a strong correlation with the comparison assets.

Dr. Philipp Giese
5. May 2019BTC$5.766,00 0.43%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 and Dax, as well as Oil and Gold. The Nikkei Index, we need to ignore this week, unfortunately, since there is only data up to 26. April was available.

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

Over the week, the correlations of the crypto-currencies are something like that. The background is that Ethereum and Ripple have not been able to join in the Bull Run of Bitcoin:

We will, as always, Bitcoin focus.

correlation: crypto-currencies vs. traditional market

The correlation between the Bitcoin price and Oil, as well as the indices, the DAX and, in particular, S&P 500 is very high. A little bit of these correlations are compensated by the negative coupling with Gold:

The special this week is the strong increase of the coupling of the Bitcoin exchange rate, with the S&P 500. The rest of the pairings stayed the previous week, quite similar:

Overall, the absolute mean correlation Bitcoins with other markets at 43 percent. Thus, it is exceptionally times larger than the correlation of the comparison assets themselves. Taking into account the compensation effects due to any of the anti-correlations, a similar picture emerges. Although Bitcoins coupling is to the other markets with 35 percent, "only" the second largest, but it is a significantly different picture emerges than in the last few months. The independent Asset continues to be Gold which has a correlation of only 17 percent. However, it is important to emphasise that, without taking into account of the Nikkei Index, these values are difficult with the previous week's comparable.

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 volatility:

In the last few days, the Performance of experienced Bitcoins a slight break-in. The reason for this Drama to Bitfinex. In addition, we consider the average monthly Performance and the rate of explosion of 2. April is in the considered window. However, Bitcoin remains the best performing Asset of the month. While the average daily Performance of the two indices, the S&P 500 and DAX are just about Zero, and the from Gold and Oil to just below Zero, the daily Performance of Bitcoin at around 0.5 per cent:

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

Bitcoin against the Oil the race

looking at the cumulative Performance since the beginning of the year, could Bitcoin, the head-to-head race against the Oil now. Since the 22. April followed the downward trend of the Performance of Oil and at the same time the upward trend from the Bitcoin course, Bitcoin is only just in the lead. Both of these Assets are, however, still significantly higher than the other comparison assets: During the two indices, the S&P 500 and the DAX, are still significant in the Plus, Gold remains just below the level of Zero:

We will need to keep track of how the coupling of Bitcoins is developed to the rest of the markets. This is, at least without the Nikkei Index is currently very high, which would make the Asset particularly interesting for institutional investors. Now the greatly reduced volatility and good Performance are, however, arouse the interest of investors.

data on 4. In may of cryptocompare.com, finance.yahoo.com and fred.stlouisfed.org used.

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