CryproQuant: correlation between BTC and S&P500 reaches all-time high

The bitcoin price is currently extremely dependent on the stock market. The level of correlation between the cryptocurrency and the US stock index S&P 500 reached its maximum, CryproQuant analysts noted.

Bitcoin is often referred to as an alternative to gold and a safe-heaven asset. But the latest statistics show that bitcoin is currently more than ever dependent on the situation in the stock market. The correlation index of bitcoin with S&P 500 reached an all-time high, CryproQuant analysts say. Now the indicator is at the level of about 0.5. When the indicator has a value greater than zero, this means that at the moment there is a direct dependence of the cryptocurrency price on the stock market, that is, the BTC rate is moving in the same direction as the stock index.

If the indicator falls below zero, this indicates the opposite dependence of BTC on the index, that is, when S&P 500 falls, the BTC price rises. The correlation index at zero means an absence of dependence.

As one can see in the chart above, the correlation between bitcoin and S&P 500 fluctuated between positive and negative, remaining low for most of BTC’s history. But since the end of 2019 – beginning of 2020, the dependence of bitcoin on the stock index became direct. In the spring of 2020, the correlation index fell sharply due to the large-scale sale of bitcoins in connection with the pandemic. Since the second half of 2021, bitcoin’s dependence on the stock market strengthened incredibly.

Such a high correlation between assets debunks the myth of “digital gold” and bitcoin’s safe haven.


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