No one expected such a disastrous first 3 months of 2020. This has caused both traditional stock markets and the crypto market to collapse. By these simultaneous dips, the Binance team has determined that Bitcoin was correlated with the behavior of the S&P 500.
Oil, gold, stocks, GDP, Bitcoin, and altcoins have all fallen at their respective levels. We started 2020 with distant news of a strange flu in China, but there was nothing to worry about. Then an attack by the United States 🇺🇸 on Iran 🇮🇷 that almost led to a massive war. Finally, the Coronavirus pandemic worldwide.
It was completely expected that everyone would revolutionize, once again downward. Panic and uncertainty have played a role for Bitcoin, and one of the world’s leading traditional finance indices, to behave similarly in the first quarter of this disastrous year.
Bitcoin was correlated with the S&P 500
The new report from the world’s largest crypto exchange has revealed a correlation of Bitcoin (BTC), with many assets from the traditional world during the first three months. The research has been led by Binance Research, the crypto exchange affiliate in charge of market monitoring.
The report details that:
“Bitcoin showed a positive and moderate correlation with stock indices in the United States. And no correlation with gold for the same period of time. “
Binance Research analyzed how Bitcoin (BTC) and other crypto assets performed against each other in the first quarter, which will undoubtedly go down in human history.
“Due to the Coronavirus pandemic and global economic turmoil, all asset prices fell in the first quarter of 2020.”
The report reveals that during January this year the price of BTC fell 10%, while the value of the S&P 500 fell 19%. Until then, the two had a relatively high correlation of (0.57).
Gold and BTC showed no correlation
Just as BTC was correlated with the S&P 500, the opposite was true for gold, against all odds.
According to Binance Research, the correlation between the two safe havens was null during the first month of 2020. But the situation changed after the “decoupling” of traditional goods and cryptocurrencies.
The price of gold, as well as that of BTC, decoupled and began to rise in price, while the traditional market is still currently showing very confusing signals.
“Despite the fact that Bitcoin shows a significant positive correlation with US stocks. USA in the first quarter of 2020, it is highly unlikely that this high correlation coefficient will persist in the medium and long term” The Binance Research team concludes.