Is Bitcoin Moving With The Market In The Face Of A More Aggressive Fed? By Investing.com


© Reuters

By Laura Sánchez

Investing.com – The argument that has been around for a long time is that he is the new “digital gold”, a hedge against inflation and a store of value.

But there are experts pointing out that Bitcoin has been trading alongside sentiment around the stock market of late, especially in recent months, as investors adjust to plans by the Federal Reserve to tighten financial conditions for the first time. time in almost two years, collect MarketWatch.

As evidence of that trend, the 100-day correlation between Bitcoin and stocks represented by the S&P 500 reached around 0.49 on Tuesday, the highest level since July 2020, according to Market data.

Furthermore, the 60-day correlation between Bitcoin and S&P 500 reached 0.54, the highest since at least 2010, reflects MarketWatch.

Correlation, which refers to the extent to which different assets trade with each other, ranges in magnitude from -1.00 to 1.00. A positive correlation means that the assets have been moving in the same direction, while a negative correlation means that they have moved in the opposite direction.

According to the graphic that we have included in this news, courtesy of MarketWatch, Bitcoin maintained a positive correlation with the S&P and the since February 2020, respectively, which means that assets have generally been moving in the same direction. It also shows an uptrend in the correlation of with the S&P 500 and the Nasdaq Composite since August 2021.

In fact, since early 2021, the correlation coefficient between Bitcoin and the S&P 500 or Nasdaq Composite has been much higher than between Bitcoin and, which has traditionally been viewed as a hedge against inflation. Bitcoin and gold were negatively correlated for various periods.

Analysts point out that more or less since the second half of 2021, Bitcoin has been related to the macroeconomic environment, and its rising or falling price has been influenced by news about the Federal Reserve, the evolution of the coronavirus and inflation expectations , Inter alia.

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