Bitcoin and S&P 500 stocks “re-coupled,” a digital asset manager claims, setting forward a new financial trend.
Bitcoin supporters call the popular crypto an uncorrelated commodity. The debate is whether it is truly non-related to other historically volatile assets such as stocks persist in the crypto-space.
The new connection argument came from Charles Edwards, Capriole Investments’ digital asset strategist. He claimed that the two marketplaces had “re-coupled” as of June 10.
He added that conventional fund managers are the ones that drive this new era of BTC. While he also showed a chart displaying a link between BTC and S&P 500 stocks at record highs.
According to Edwards, in the past half of the year, conventional investors flocked to the BTC marketplace. This causes risky shifts in 1-1 correlation with the popular crypto.
This means Edwards expects the high correlation to remain a normal thing in the marketplace, seeing the influx of conventional investors to the crypto-verse.
PlanB, who created the stock-to-flow pricing model, also agrees with that. He sees this as a good happening and that now BTC is interesting to the FED.
Nonetheless, Edwards’ new correlation argument strongly contradicts other Coin Metrics statements. There are expectations for the BTC to stock correlation to get back to almost zero unless profound shifts happen either in BTC or in the S&P 500 index.
Coin Metrics’ and famous cryptocurrency trader Luke Martin share the same reasoning. Claiming last week that while both are risk-on investments, they show little or no connection and that bitcoin is proof of this.
Bitcoin was uncorrelated all this time, reflected in the last three years, Martin said, by its zero links to the famous S&P 500 stocks index.
Bitcoin is trading at 9,513 at pixel time. It earned 1.65 percent in one day and 4.55 percent in one week.