Bitcoin appears to be not quite as correlated to the stock market as was just thought as late as this morning.
As of this afternoon that correlation appears to no longer be the case.
As bitcoin saw some of it's biggest losses on the same day that the US stock market, and global risky assets were taking it on the chin, many started to speculate that perhaps bitcoin was no longer a good hedge against just about everything else.
And perhaps for a day or two, they were right.
Then comes today:
The dow is down close to 700 points (again), yet bitcoin is actually enjoying a rather strong session.
If the recent history were to repeat itself and CNBC were to be right with their statement this morning, we would expect a similar blood bath in cryptocurrencies...
https://www.cnbc.com/2018/02/08/bitcoins-correlation-with-stocks-jumps-to-2-year-high.html
Yet, we see this:
Bitcoin is up close to 4% and was up nearly 5% earlier in the day.
Just like anything else, it works until it doesn't.
Which is likely similar to what was going on with bitcoin being correlated to other financial assets in the first place.
However, I would like to point out that as more and more of the Wall Street type money enters the space, and the price of bitcoin goes higher and higher I would imagine we will see more and more of a correlation than we have ever seen in the past.
In a complete risk-off environment like we saw recently, bitcoin probably sells off as well.
Until we reach that point though, I look forward to watching bitcoin return to its "safe haven" classification and become a nice spot for money to hide out in while it waits for stocks to calm down.
CNBC
Bitcoin becomes just like everything else on Wall Street as correlation with stocks jumps to 2-year high
The 90-day correlation between bitcoin and the S&P 500 is the highest since the cryptocurrency started getting attention in January 2016.