The Importance Of Bitcoin To The Financial Industry Is Growing, Which Is Why The Cryptocurrency Itself Is Able To Influence The Stock Market During Major Price Movements, Analysts At The Singapore Banking Giant Dbs Found Out.
In Their Latest Post, They Look At The Correlations Of Various Assets, Including Bonds, Stocks, Bitcoin, And Gold, And Their Ability To Influence Each Other. Since November 2020, Bitcoin Has Shown Significant Growth And Has Been Positively Correlated With S&p 500 Index Futures Every Month. The Authors Concluded That On This Basis, Bitcoin Can Be Classified As A Risky Asset, However, The Correlation Is Still “Relatively Low” At 0.20.
They Also Evaluated How S&p 500 Futures Behave During Sharp Fluctuations In The Price Of Bitcoin. It Turned Out That At Such Moments, The Hourly Correlation Rose To 0.26, Although Under Normal Conditions It Is 0.19.
“This Suggests That Broader Sentiment In The Stock Market May Be Complemented By Sentiment In The Bitcoin Market For A Limited Period Of Time (60 Hours), Leading To Unusually Large Movements,” The Bank Found Out.
Other Observations Of Statistics Showed That After Significant Fluctuations In The Price Of Bitcoin, The Volatility Of The Stock Market Was Noticeably Higher Than Usual. “bitcoin Is No Longer The Peripheral Asset It Once Was,” Writes Dbs, Urging Stock Market Participants To Monitor Cryptocurrencies To Assess Risk And Sentiment.
