Bitcoin Investors Struggling
Even with the recent price recovery, the profitability of bitcoin has been at the worst levels since 2020. What has happened has been both a mixture of declining prices over a number of months and newer investors who got in at higher prices being left with bags of losses. As a result, the profitability has now touched levels that it has not seen since May 2020.
Source : https://bitcoinist.com/bitcoin-profitability-touches-two-year-lows/
Topic: ㅤ (Read 464 times)
This article examines extreme movements in the price of Bitcoin. Since the inception of Bitcoin in 2010 the price of Bitcoin has shown wild swings with impressive booms and busts.
Gangwal and Longin used extreme value theory to study the statistical distribution of extreme price movements And calculate risk measures commonly used by financial institutions in risk and asset management. they also drew some conclusions about Bitcoin's status as a currency or speculative asset which is important for practical matters.
The objective of this article is to introduce some statistical price properties of Bitcoin focusing on its price movements.
So, the problem that we must find an answer to this question : Is Bitcoin a currency or a speculative asset?
Source : https://roz-key.blogspot.com/2022/06/extreme-movements-in-bitcoin-prices.html
Gangwal and Longin used extreme value theory to study the statistical distribution of extreme price movements And calculate risk measures commonly used by financial institutions in risk and asset management. they also drew some conclusions about Bitcoin's status as a currency or speculative asset which is important for practical matters.
The objective of this article is to introduce some statistical price properties of Bitcoin focusing on its price movements.
So, the problem that we must find an answer to this question : Is Bitcoin a currency or a speculative asset?
Source : https://roz-key.blogspot.com/2022/06/extreme-movements-in-bitcoin-prices.html
I wish this post was true,,, but today we are experiencing a really bad period so far especially because ETH is now below the 2017 ATH,,, and to be living in a time when you are holding ETH that was more valuable 5 years ago, that is something of a warning to BTC.
And yes ETH case is probably the merging news but Bitcoin also dropping is all pointing to stock market and inflation news effects. Tough week for everyone.
And yes ETH case is probably the merging news but Bitcoin also dropping is all pointing to stock market and inflation news effects. Tough week for everyone.
I believe it will not make a difference for the past and current Bull/Bear cycles for Bitcoin. It will be the same 4-year cycle repeating over and over and over until another breakthrough that's truly better replaces Bitcoin. If Bitcoin crashes below 2017's ATH, then it's only an illustration of the high volatility of the market during 2017.
The cycle will for sure continue,,, I believe in it but whether I do or not, it will happen. All markets move in cycles.
But how the cycle happens, the period in between, how high the ATH and how low the floor,,, all of this will be different.
We already saw how "small" the peak for Bitcoin was this cycle. We already see how bad the lows are for ETH this cycle (lower than the last ATH).
Anyway, as you said, this Bitcoin event is a reflection of high market volatility in 2017, but that was also a stock market correlation.
I wish this post was true,,, but today we are experiencing a really bad period so far especially because ETH is now below the 2017 ATH,,, and to be living in a time when you are holding ETH that was more valuable 5 years ago, that is something of a warning to BTC.
And yes ETH case is probably the merging news but Bitcoin also dropping is all pointing to stock market and inflation news effects. Tough week for everyone.
And yes ETH case is probably the merging news but Bitcoin also dropping is all pointing to stock market and inflation news effects. Tough week for everyone.
I believe it will not make a difference for the past and current Bull/Bear cycles for Bitcoin. It will be the same 4-year cycle repeating over and over and over until another breakthrough that's truly better replaces Bitcoin. If Bitcoin crashes below 2017's ATH, then it's only an illustration of the high volatility of the market during 2017.
I'm a bit confused, as the graph seems to be missing a reference to bitcoin, yet the correlation is taking place as we speak. Major markets are falling and so is bitcoin - that seems like a prime example where the correlation is strengthening. All financial markets are intertwined and when fear is running wild people just want to convert their assets into a stable form, which is most likely going to be something like us dollars. People are cashing out of shares and crypto assets right now.
There was a moment when it didn't correlated, and that was the discussion, not that it will never be correlated again, which it does right now. Sometimes we just need to learn that recession will always be hitting us differently, and when everyone needs money. Remember that 2008 period and afterwards? Everyone had trouble finding some money to survive, because it was all going to save the world from the banking disaster.Moreover, I have to say that we are going to live a very tough period, inflation is a big problem but at least we all earn more and we all spend more and we just need to rearrange our needs accordingly, yet recession is trouble because there is no more money.
The historical correlation of bitcoin with traditional markets continues to decline.
Although quite recently, about 2 months ago, the situation was exactly the opposite: Bitcoin's correlation with Nasdaq 100 reached ATH
In the context of the current monetary policy of the Fed and its hawkish policy, this is a good trend. Now that all markets are outflowing funds and there is a pronounced bearish sentiment, the lack of correlation with the stock market and with various markets may not hold back the growth of bitcoin so much and allow investors to pour liquidity from traditional markets into bitcoin, thereby making bitcoin not risky an asset that investors considered it to be in the last 2-3 months, namely, a safe haven, value preservation.
Also, a month ago, there was an opinion in the media that the growth of bitcoin in 2021 could be triggered by the transfer of assets from the stock market to bitcoin, as shares are constantly losing value due to the current trend to curb inflation and price growth, and this can lead to growth bitcoin prices in the region of $70,000-$100,000. Although I personally do not believe that bitcoin will show ATH in 2022, the loss of correlation may allow, for example, the price to rise to $50,000.
Although quite recently, about 2 months ago, the situation was exactly the opposite: Bitcoin's correlation with Nasdaq 100 reached ATH
In the context of the current monetary policy of the Fed and its hawkish policy, this is a good trend. Now that all markets are outflowing funds and there is a pronounced bearish sentiment, the lack of correlation with the stock market and with various markets may not hold back the growth of bitcoin so much and allow investors to pour liquidity from traditional markets into bitcoin, thereby making bitcoin not risky an asset that investors considered it to be in the last 2-3 months, namely, a safe haven, value preservation.
Also, a month ago, there was an opinion in the media that the growth of bitcoin in 2021 could be triggered by the transfer of assets from the stock market to bitcoin, as shares are constantly losing value due to the current trend to curb inflation and price growth, and this can lead to growth bitcoin prices in the region of $70,000-$100,000. Although I personally do not believe that bitcoin will show ATH in 2022, the loss of correlation may allow, for example, the price to rise to $50,000.
I'm a bit confused, as the graph seems to be missing a reference to bitcoin, yet the correlation is taking place as we speak. Major markets are falling and so is bitcoin - that seems like a prime example where the correlation is strengthening. All financial markets are intertwined and when fear is running wild people just want to convert their assets into a stable form, which is most likely going to be something like us dollars. People are cashing out of shares and crypto assets right now.
I wish this post was true,,, but today we are experiencing a really bad period so far especially because ETH is now below the 2017 ATH,,, and to be living in a time when you are holding ETH that was more valuable 5 years ago, that is something of a warning to BTC.
And yes ETH case is probably the merging news but Bitcoin also dropping is all pointing to stock market and inflation news effects. Tough week for everyone.
And yes ETH case is probably the merging news but Bitcoin also dropping is all pointing to stock market and inflation news effects. Tough week for everyone.
Fake? Ser, I literally included the link of the site that chart came from. Are you saying CoinMetrics is giving us the plebs false data? Plus what would OP's zoomed out chart currently look like?
Read my whole post, I was just making fun of pooya87 and his claims that bitcoin has no correlation with the traditional markets, for him everything that contradicts his belief is based on suppositions fake. Add the fact that the current moves are heavily influenced by the US market and he is probably having his worse day yet.
Is it also worth mentioning if "the weakening" itself starts weakening after another few days? If yes, then I agree to disagree. Zoom out, it's getting stronger and stronger since the last bull cycle started. It could signify that as Bitcoin becomes more and more mainstream, the correlation between legacy markets and Bitcoin could become more and more correlated.
For a brief period, it looked like it was coming down, the graphs do show a tiny bump, well that is now gone and done for it, I don't know what caused that and maybe it was the traditional pause on Memorial day while the crypto exchange never close, but with the current events unfolding I wonder why anyone would even dare today the things are not interlinked like never before, even the time of the dumps of both the stock market and crypto exchanges were timed to the minute.
It's understandable in my opinion. There are some people within the Bitcoin community who take some more time before finally being convinced that something has in fact changed. Bitcoin entering more and more of the mainstream has changed market its behavior, BUT it's debatable. It might always be influenced. Because all liquidity comes from Central Banks wether they start expanding, or tightening.
a month ago, there was an opinion in the media that the growth of bitcoin in 2021 could be triggered by the transfer of assets from the stock market to bitcoin, as shares are constantly losing value due to the current trend to curb inflation and price growth, and this can lead to growth bitcoin prices in the region of $70,000-$100,000. Although I personally do not believe that bitcoin will show ATH in 2022, the loss of correlation may allow, for example, the price to rise to $50,000.
I feel like the chart is not fake, but at the same time I do not think that it is really that much of a shock neither. This happens every few years, something happens that makes the stocks go up while crypto is down or crypto is up while stocks are down, it happens and not a shock. But, then it goes back to normal and we are aligned again.This is what I am guessing will happen with the current situation as well. This is of course just a guess, I can't really say that it will definitely be like that again, maybe this time around it is more permanent difference, but I highly doubt that and countdown must have already started until we are already getting close again.
I don't think there is currently enough data to indicate any decorrelation. It is still extremely punctual. Even more a correlation that is strong enough to send Bitcoin up 80% (what it would take to hit $50K). And I also think that a recovery like this will only be seen 100 days before the halving. However, I hope that in the next few years we will be able to see decorrelation, even if it means stocks go up and bitcoin doesn't, for example. As long as Bitcoin remains correlated, this means that the characteristics that make it incredible as an asset are not valued, and that it is simply another asset benefiting from inflationary forces in the money supply.
Fake? Ser, I literally included the link of the site that chart came from. Are you saying CoinMetrics is giving us the plebs false data? Plus what would OP's zoomed out chart currently look like?
Read my whole post, I was just making fun of pooya87 and his claims that bitcoin has no correlation with the traditional markets, for him everything that contradicts his belief is based on suppositions fake. Add the fact that the current moves are heavily influenced by the US market and he is probably having his worse day yet.
Is it also worth mentioning if "the weakening" itself starts weakening after another few days? If yes, then I agree to disagree. Zoom out, it's getting stronger and stronger since the last bull cycle started. It could signify that as Bitcoin becomes more and more mainstream, the correlation between legacy markets and Bitcoin could become more and more correlated.
For a brief period, it looked like it was coming down, the graphs do show a tiny bump, well that is now gone and done for it, I don't know what caused that and maybe it was the traditional pause on Memorial day while the crypto exchange never close, but with the current events unfolding I wonder why anyone would even dare today the things are not interlinked like never before, even the time of the dumps of both the stock market and crypto exchanges were timed to the minute.
Of course, this graph Wind_FURY posted is also something that is definitely fake, right?
Fake? Ser, I literally included the link of the site that chart came from. Are you saying CoinMetrics is giving us the plebs false data? Plus what would OP's zoomed out chart currently look like?
OP, that chart is just from first of March to end of May. That's merely 3 months, and not enough data to say that the correlation has truly weakened.
Well, it has indeed weakened for a few days, and that itself is a thing worth mentioning because you can see even on your chart there is basically not much room left before we can say there are more tied together than sp500 and dow. Any fluctuation would mean a breakout of the current trend, for good or for worse and to be honest I would pick either, things are getting a bit boring.
Is it also worth mentioning if "the weakening" itself starts weakening after another few days? If yes, then I agree to disagree. Zoom out, it's getting stronger and stronger since the last bull cycle started. It could signify that as Bitcoin becomes more and more mainstream, the correlation between legacy markets and Bitcoin could become more and more correlated.
The historical correlation of bitcoin with traditional markets continues to decline.
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I've always had a feeling that there should an inverse correlation between Bitcoin and the stock market, and now I'm happy that it's starting to happen.
Before BTC becomes broadly accepted money, it can serve as a store of value for those who can see that it's actually better than gold in that regard.
The inverse correlation will happen the more these few months and especially when the market has a speedy recovery.
But the correlation view is grossly subjective and most times favours bitcoin when it is viewed from the angle of traders switching from one assets to anyone because if price effects.
The historical correlation of bitcoin with traditional markets continues to decline.
https://i.ibb.co/0JVw4VR/photo-2022-05-31-16-19-37.jpg
Although quite recently, about 2 months ago, the situation was exactly the opposite: Bitcoin's correlation with Nasdaq 100 reached ATH
In the context of the current monetary policy of the Fed and its hawkish policy, this is a good trend. Now that all markets are outflowing funds and there is a pronounced bearish sentiment, the lack of correlation with the stock market and with various markets may not hold back the growth of bitcoin so much and allow investors to pour liquidity from traditional markets into bitcoin, thereby making bitcoin not risky an asset that investors considered it to be in the last 2-3 months, namely, a safe haven, value preservation.
Also, a month ago, there was an opinion in the media that the growth of bitcoin in 2021 could be triggered by the transfer of assets from the stock market to bitcoin, as shares are constantly losing value due to the current trend to curb inflation and price growth, and this can lead to growth bitcoin prices in the region of $70,000-$100,000. Although I personally do not believe that bitcoin will show ATH in 2022, the loss of correlation may allow, for example, the price to rise to $50,000.
https://i.ibb.co/0JVw4VR/photo-2022-05-31-16-19-37.jpg
Although quite recently, about 2 months ago, the situation was exactly the opposite: Bitcoin's correlation with Nasdaq 100 reached ATH
In the context of the current monetary policy of the Fed and its hawkish policy, this is a good trend. Now that all markets are outflowing funds and there is a pronounced bearish sentiment, the lack of correlation with the stock market and with various markets may not hold back the growth of bitcoin so much and allow investors to pour liquidity from traditional markets into bitcoin, thereby making bitcoin not risky an asset that investors considered it to be in the last 2-3 months, namely, a safe haven, value preservation.
Also, a month ago, there was an opinion in the media that the growth of bitcoin in 2021 could be triggered by the transfer of assets from the stock market to bitcoin, as shares are constantly losing value due to the current trend to curb inflation and price growth, and this can lead to growth bitcoin prices in the region of $70,000-$100,000. Although I personally do not believe that bitcoin will show ATH in 2022, the loss of correlation may allow, for example, the price to rise to $50,000.
The data seems to show a great point for the crypto market as this correlation is weakening. We need to be aware however that Bitcoin's correlation with traditional markets reveals in the panic moments. When panic is around almost all the markets react in the same way coz the Bitcoin Whales are those of Wallstreet wolves indeed.
OP, that chart is just from first of March to end of May. That's merely 3 months, and not enough data to say that the correlation has truly weakened. When in doubt, always zoom out. Can you post the link of the site, and can we zoom out?
This is the zoomed out chart from CoinMetrics, https://charts.coinmetrics.io/correlations/
The correlation is currently in ATH. I believe it's because Bitcoin has become very mainstream and has surged in adoption among legacy market investors/traders.
That’s the thing though, when you are talking about "begins to weaken" that means it has begun, if you zoom out then you are looking at the general situation and not just right now. In order to see the short period of time and what it is doing, you need to zoom in and when you zoom in you start to see that it has weakened a bit, not a lot but just a bit.This is the zoomed out chart from CoinMetrics, https://charts.coinmetrics.io/correlations/
The correlation is currently in ATH. I believe it's because Bitcoin has become very mainstream and has surged in adoption among legacy market investors/traders.
This doesn't mean that it has started to weaken and will keep going like that, of course it may not go like that as well but we all know that it at least "started" and this is how you see it, not by zooming out. I personally feel like the correlation could get even worse, because market doesn't always react the same things, and if it is not a global thing, then it may not be relevant all the time.
Here are a handful of examples I found with a quick search on the internet:
... A negative correlation means that assets tend to move in the opposite direction.
For its part, bitcoin has been viewed as an asset that isn’t correlated with many others. The crypto asset certainly has a low correlation with stocks, as represented by the S&P 500 index SPX, -0.75% and a pretty low correlation with technology stocks, as represented by the large-capitalization oriented Nasdaq-100 index NDX, -0.74%.
For its part, bitcoin has been viewed as an asset that isn’t correlated with many others. The crypto asset certainly has a low correlation with stocks, as represented by the S&P 500 index SPX, -0.75% and a pretty low correlation with technology stocks, as represented by the large-capitalization oriented Nasdaq-100 index NDX, -0.74%.
Lol, you just picked some random titles and you haven't even read the articles, right?
But the intriguing part is that you bolded the -0.75% and -0.74%, for god's sake!!! this is so funny, you actually thought that those were the correlation rates?
Those are the daily index changes, the change in the daily value at closing time!!!! 
Let's get over the above, and ignore the clearly mentioned a correlation, just the paragraph below, and let's dig deeper
Finally here is an article on Forbes with some quotes from different people in it representing another view:
https://www.forbes.com/sites/benjaminpirus/2020/03/20/contrary-to-popular-belief-bitcoin-isnt-consistently-correlated-to-anything/
https://www.forbes.com/sites/benjaminpirus/2020/03/20/contrary-to-popular-belief-bitcoin-isnt-consistently-correlated-to-anything/
Yeah, pretty accurate article,
OP, that chart is just from first of March to end of May. That's merely 3 months, and not enough data to say that the correlation has truly weakened.
Well, it has indeed weakened for a few days, and that itself is a thing worth mentioning because you can see even on your chart there is basically not much room left before we can say there are more tied together than sp500 and dow. Any fluctuation would mean a breakout of the current trend, for good or for worse and to be honest I would pick either, things are getting a bit boring.
The historical correlation of bitcoin with traditional markets continues to decline.
~
~
I've always had a feeling that there should an inverse correlation between Bitcoin and the stock market, and now I'm happy that it's starting to happen.
Before BTC becomes broadly accepted money, it can serve as a store of value for those who can see that it's actually better than gold in that regard.
OP, that chart is just from first of March to end of May. That's merely 3 months, and not enough data to say that the correlation has truly weakened. When in doubt, always zoom out. Can you post the link of the site, and can we zoom out?
This is the zoomed out chart from CoinMetrics, https://charts.coinmetrics.io/correlations/
The correlation is currently in ATH. I believe it's because Bitcoin has become very mainstream and has surged in adoption among legacy market investors/traders.
This is the zoomed out chart from CoinMetrics, https://charts.coinmetrics.io/correlations/
The correlation is currently in ATH. I believe it's because Bitcoin has become very mainstream and has surged in adoption among legacy market investors/traders.
How much I communicate with various people, read analytical excerpts, look at various metrics daily, no one has yet denied the correlation of Bitcoin with traditional markets, except for you. You are probably the only one I have met on various platforms who is sure that there is no correlation and Bitcoin is a completely independent asset. Well, for a convinced bitcoin maximalist (if you are one), such denials are not surprising, just like the denials by some that bitcoin is a risky asset and not a safe haven.
Lots of others are saying the same thing as I do, you are just not looking.It's like during those times when price drops a little and the internet is filled with idiots saying "bitcoin is dead" then I call them on their bullshit on bitcointalk. If you only look at the mass FUD and my comment alone you'd think I'm the only one saying the opposite!!!
Here are a handful of examples I found with a quick search on the internet:
... A negative correlation means that assets tend to move in the opposite direction.
For its part, bitcoin has been viewed as an asset that isn’t correlated with many others. The crypto asset certainly has a low correlation with stocks, as represented by the S&P 500 index SPX, -0.75% and a pretty low correlation with technology stocks, as represented by the large-capitalization oriented Nasdaq-100 index NDX, -0.74%.
For its part, bitcoin has been viewed as an asset that isn’t correlated with many others. The crypto asset certainly has a low correlation with stocks, as represented by the S&P 500 index SPX, -0.75% and a pretty low correlation with technology stocks, as represented by the large-capitalization oriented Nasdaq-100 index NDX, -0.74%.
Quote from: https://www.reddit.com/r/Bitcoin/comments/saxyyd/if_bitcoin_is_as_correlated_to_the_stock_market/htxb83w/
Bitcoin is absolutely not correlated to the stock market. Studies say its correlation is about 0.36. Things are correlated when this R2 is above 0.8
If you think that the correlation is because bitcoin is going down these days, the same as the stock market is, is just because both asset classes are highly liquid. So, when people need cash, those tend to be the first things they sell
If you think that the correlation is because bitcoin is going down these days, the same as the stock market is, is just because both asset classes are highly liquid. So, when people need cash, those tend to be the first things they sell
Quote from: https://www.reddit.com/r/Bitcoin/comments/saxyyd/if_bitcoin_is_as_correlated_to_the_stock_market/htwmm8i/
BTC price action is behaving as if correlated to the stock market. This speaks to the investment thesis of the current buyers/sellers, and the role BTC is playing as an allocation in their portfolio. I’ve been hodling my BTC since 2017 but I have been rotating out of growth stocks and reducing my stake in equity overall since Q4. In terms of my behavior, it is not correlated, but my view is not the consensus view of the current market participants. We are early and hopefully through the coming shitstorm the consensus view will shift away as ownership shifts away from traders and speculators.
Quote from: https://www.reddit.com/r/Bitcoin/comments/saxyyd/if_bitcoin_is_as_correlated_to_the_stock_market/htzc130/
Why would you think Bitcoin is correlated to the stock market? Is that something you read somewhere and thought it sounded smart? Sounds impressive, but you are just spreading crap with nothing to back it up. Nothing. Do you even know the difference between the stock market and Bitcoin?
Some of them are saying pretty much the same thing as I said (no correlations before whatsoever, then a weak correlation in past 2 years starting from pandemic crash coincidence)
Quote from: https://www.reddit.com/r/CryptoCurrency/comments/sbsh4t/is_bitcoin_following_the_stock_market_as_much_as/
for the last year or two, they have been somewhat linked.
Before that, the correlation was even worse, almost like that of two independent subjects.
It seems that it's been since the Corona virus crash, that we've had that increase in correlation. And getting more of a link.
Before that, the correlation was even worse, almost like that of two independent subjects.
It seems that it's been since the Corona virus crash, that we've had that increase in correlation. And getting more of a link.
Finally here is an article on Forbes with some quotes from different people in it representing another view:
https://www.forbes.com/sites/benjaminpirus/2020/03/20/contrary-to-popular-belief-bitcoin-isnt-consistently-correlated-to-anything/
Of course there are lots more and these were some of the examples. There are many opinions out there, some just like mine, some opposite and some in between...
I've been noticing the correlation of bitcoin to the traditional market and looking at it as it weakens, that's much better. Because bitcoin is better to be a stand alone market bringing the whole market of cryptocurrencies as its standard bearer.
This is also gives the idea that adoption is growing and more people are jumping from the usual markets to the crypto market as they get to learn and understand how it works.
This is also gives the idea that adoption is growing and more people are jumping from the usual markets to the crypto market as they get to learn and understand how it works.
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