Topic: Correlation of Bitcoin is Beginning to Show Some Evidence (Read 148 times)

Absolutely. It's not happened often enough, or with any significant consistency, for anyone to be able to say there's a direct and ongoing correlation between the two. At this stage we can only say that there might be some correlation or that yes, there was some correlation that actually turned out to be a coincidence.

I bore in mind when making the OP that, although it is generally accepted that the dollar and gold generally have a very low correlation (one goes up, the other down and vice versa) there are times where this pattern also breaks down.

I think the thing with correlation is that it is simply a statistical measure. It just looks at the price movements of different assets and gives us an idea how closely they follow each other. So we are just applying this statistical measure to bitcoin and seeing what results are being thrown up.

Interesting pattern, but I personally don't think it means much. I'd chalk it up as coincidences.


Quite possible, but I'd say this reputation was damaged recently, when Bitcoin crashed right along with the stock market (granted, its slide started way before), suggesting that it also moves towards the general direction of the economy, rather than against it. It's doing good at the moment, but who knows how long it will last. Gold is still a far better option on that end.

as a sizable market, bitcoin is influenced by economical changes in the countries but at the end of the day bitcoin is still a global currency or asset if you will, and local changes shouldn't affect it that much.
for example why should i even care if US dollar is weakening or strengthening while i am buying bitcoin?

So I've been following bitcoin for a while and looking at various charts and other data. For most of that time I couldn't see any way that bitcoin had any correlation with any other assets other than the vast majority of other cryptocurrencies.

In the past few days however, I have noticed patterns with the dollar. Take today as an example. The dollar has weakened against a basket of other fiat currencies but here's the interesting thing - bitcoin has appreciated in price by almost the same percentage as the percentage loss of the dollar against other major currencies. This is happening more and more. Dollar goes down; bitcoin goes up. And vice versa.

This could provide some advantage in timing trades of bitcoin. Monitoring economic data where we expect the dollar to weaken could provide an additional reason to buy bitcoin. The underlying market suggests that people are transferring from dollar to bitcoin when the expectation is that the dollar is losing strength. This further sugggests that bitcoin is now being seen as a store of wealth, which was not the case a year ago. This might also go some way to explain why the price of bitcoin is more than 1000% compared to twelve months ago.

The theories need more testing but initial comparisons are certainly interesting and provide some real clues into what's happening with the markets in general and where bitcoin is going.