Recent Bloodshed in Stocks Was Different Than Drop in Bitcoin Price

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Reported today on Being Crypto

For the full article visit: https://beincrypto.com/recent-bloodshed-in-stocks-is-different-thank-dip-in-bitcoin-price/

As the panic around the spread of the Covid-19 virus continues to engulf the globe, and traditional markets react negatively, a light is being shone on Bitcoin. Questions surround why the supposed anti-correlated asset is not flourishing. However, the correlation between the stock market collapse and the fall in the Bitcoin price should be put into perspective.

The S&P 500 at the start of the week dipped 2,000 points. [CNBC] This is something that has not been seen since the 2008 financial crisis, and it also represents a 7.6 percent loss in value. Meanwhile, the fall in Bitcoin's price over the same 24 hours equates to a 5 percent loss.

These two percentage losses may seem close on face value. But a 7.6 percent loss for one of the world's most popular stock market indexes actually represents about a 41 percent loss for Bitcoin if historical volatility is taken into consideration, as described by Hunter Horsley, BitWise Invest CEO in the below tweet.

S&P is -7.6% today.

Based on historical volatilityWe can describe volatility as how much the value of an asset changes over a given time. A volatility index... More, a -7.6% move in S&P is == to -41% in BTC.

Yet in the last 24 hrs BTC is only -5%.

And only -0.5% since midnight today.

That's uncorrelated.

Treasuries are up (GOVT +1%)! That's a negative correl, which is a different thing. pic.twitter.com/F0oVlGp8m0

- Hunter Horsley (@HHorsley) March 9, 2020

To call the current stock market collapse correlated to Bitcoin's dip in price would be an oversimplification. Bitcoin is a known volatile asset that is prone to swings of five to 10 percent on regular occasions. This dip in the price of Bitcoin is not something that would affect investors in the same way that a 7.6 percent drop in the S&P 500 would.

No case for Bitcoi
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