the the coupling between The Bitcoin price and the traditional markets is still minimal. The volatility is on the Decline, however, is accompanied unfortunately by a bad Performance.
Dr. Philipp Giese
4. February 2019BTC$3.464,15 -0.12%part Facebook Twitter LinkedIn xing mail
For some months now, we keep track of how Bitcoin fails in comparison to traditional markets. This is not simply a comparison of the Performance. Institutional investors are interested in Bitcoins claim to be a non-correlated, stable Asset, extremely. Some time ago, I have dedicated myself to the part of a guest contribution on the €uro Fund research, the question of whether Bitcoin and the strongly correlated crypto market would be a good addition to classic portfolio. This question is the institutional investors in the crypto-market is interested in, less of a hope of a new Bull Run like the end of 2017. to clarify
the Suitability of classical Portfolios can be considered an Investor in various sizes. For one, it would be interesting to see whether, and if so, how strong is Bitcoin linked to traditional markets. On the other, a stable Asset for a long-term Investment is attractive. The volatility of the asset do not need to be extremely small, but it should have at least over a longer period of time, a certain degree of stability.
How to develop the relationship between Bitcoin and the traditional markets?
Since the beginning of November, we are therefore pursuing, and how Bitcoin compares to traditional markets. We, therefore, pay attention to the correlation in the last month, on a sliding correlation of a continuous volatility and a sliding Performance. The last three values are calculated for each day based on the last 30 days. Since the correlations within the crypto market behavior very similar to BTC for institutional investors, is currently the most interesting, we focus mostly on the Bitcoin price. As a comparison, assets in traditional markets, we look at the indices the S&P 500, Dow Jones and the Dax, Oil and Gold.
Read also: Bitcoin, Ethereum, and Ripple – rate analysis KW02 – when will the next upward movement?
In the last days is like the correlation between Bitcoin and his two comrades-in-arms Ethereum and XRP significantly:
of Course, you have to put everything in Relation: A correlation of over 80 percent is still huge. Furthermore, it is enough if we focus for a comparison of the traditional and the crypto-market on Bitcoin.
correlation: crypto-currencies vs. traditional market
The correlation of Bitcoin to be considered in traditional markets is still very weak. Regarding Oil, it is weak in opposite directions and with respect to Gold moderately anti-correlated. Regarding the indices the S&P 500, DAX and Dow Jones, we currently see weak positive correlations:
in Absolute terms, Bitcoin has currently the lowest correlation to the market and developed quite independently from classical Assets. Gold, in contrast, belongs to the time in opposite directions.
As you can see from the table above, is correlated to Bitcoin to all of the comparison assets, except for Oil and Gold positive. The strong negative correlation of Gold to highlights the positive correlations of the indexes Dow Jones, S&P 500 and the DAX:
Overall, the average correlation Bitcoins with other markets about 14 percent. Even Gold was within the last month, with nearly 30 percent, a significantly higher average correlation.
Bitcoins volatility approaches a classic market
thanks to the current sideways phase, the volatility of Bitcoins has fallen even further, and could fall below four percent:
Read also: crypto – and traditional markets KW49 – Bitcoin: correlation to the DAX rises
Furthermore, the volatility is, of course, significantly higher than that of the comparison assets, which is not surprising. But it is like that. Thus it represents, at the least, an uncertain level of safety, with which an Investor can expect.
are exuberant more tones should be avoided. Between September and mid-November, the Bitcoin trended flat. Thereafter, the crypto market knew only one direction and that was downward.
the First warning signs of such a development we see in the Performance. This has now fallen significantly under the Performances of the comparison of the assets and as the only negative. Furthermore, Oil Futures are the most profitable:
Up to this Performance remains Bitcoin, however, as a Supplement to traditional Portfolios of interest: For some time the coupling is to the classic markets, is very low and the volatility is decreasing. So it’s no wonder that the interest on the part of institutional investors is increasing.
data on the Basis of cryptocompare.com, finance.yahoo.com and fred.stlouisfed.org
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