The founder of Quantum Economics sees the highest S&P 500 and BTC correlation in history as a result of the COVID-19 pandemic. What does that mean?
Did the coronavirus increase the correlations?
Analyst, Trader and, according to many, a great crypto advisor, Mati Greenspan explains that Bitcoin and the stock market index of the 500 largest companies is more correlate during the coronavirus pandemic than one might think.
The graph shows the BTC’s correlation with the S&P 500, where 1 is a perfect correlation, 0 is no correlation and -1 is the inverse correlation. As Greenspan himself admitted, referring to the chart, directing his words to Bitcoin enthusiasts:
“most of you won’t like what I have to say.”
30-day rolling correlation between BTC and S&P 500
According to data, BTC and S&P 500 currently correlate with approximately 0.6 points. This is the highest correlation since the beginning of 2011 when the correlation barely touched 0.3 points (practically no correlation). Mati Greenspan concludes from the data that there is no indication that the cryptocurrency will be our saviour, and that Bitcoin is still considered as a risky investment and has not reached the status of a safe haven like gold.
BTC is still going up
Speaking further on Virtual Blockchain Week, Greenspan brings us closer to the performance chart of individual assets and highlights that Bitcoin is still one of the best-performing assets during the coronavirus (COVID-19) pandemic.
Green – USD. Yellow – Gold. White – Silver. Blue – S&P 500. Orange – BTC. Purple – Crude Oil. Screenshot from Quantum Economics conference.
This shows us that in such a difficult situation for the global economy, Bitcoin is doing quite well, because, in contrast to crude oil, BTC increased by 7% after a huge dip. In the long run, this crypto may become a stable alternative to fiduciary money (fiat), but as Mati himself stressed, there is still a long way to go to catch up with gold status, that has taken thousands of years to build up.