💀Bitcoin and StockMarket correlation WILL KILL BTC! 🧵
Many used to believe that BTC dominates as it operates independently of any financial indices. However, recent studies reveal that the Bitcoin price and stock market follow the same trend. Does it mean BitcoinCrash? 1/6
* Bitcoin was popular for being an uncorrelated asset. * Gradually, the StockMarkets realised its worth. * The value of DigitalAssets rose from 620B to 3T (2017 - 2021). * Through these years, the correlation between the cryptomarket and traditional markets... 2/6
... have had an eye-catching increase. @IMFNews reports. * This limits the benefits of risk diversification and increases the risk of financial market contagion. * The correlation between cryptocurrencies like BTC and ETH with the stock market was triggered after the... 3/6
... recent COVID19 pandemic. * These coins were viewed as tools to help with risk diversification and work as a hedge against fluctuations in other assets. * The central bank crisis in 2020 changed everything. * The world economy was thirsty, and investors were more... 4/6
... open to risk. So, the price of cryptocurrencies and US stocks increased. * As a result, the number of spillovers from Bitcoin returns and volatility to stock markets increased dramatically in 2020–21 compared to 2017–19.
What will happen to BTC, then?
* This correlation, contrary to what you may think, is not all bad. * Yes BTC was independent of any other financial market and index, BUT * We can use this increasing correlation between Bitcoin and stock markets to predict the market.
SMART INVESTORS USE THE OPPORTUNITIES! 6/6
Read the full analysis here:
this twitter thread.