ARK: “Bitcoin’s Correlation With The S&P 500 Reached” ATH, Opportunity Knocks
16 June 2022 - 3:40PM
NEWSBTC
This counterintuitive thinking by ARK Investment is the reason why
we subscribe to their “The Bitcoin Monthly” report. While
everybody complains about bitcoin’s dance in unison with the stock
market, they keep it cool and even frame it as an opportunity.
Which it is. It’s not ideal that traders treat bitcoin like a
risk-on asset, but there’s certainly logic behind it. Short-sighted
people see bitcoin as an investment vehicle and little else.
Excited to introduce the first official issue of “The Bitcoin
Monthly” Starting this month, ARK will be publishing an in-depth
report covering Bitcoin’s market action and sharing where we think
the market's headed. Here are the major highlights from this
month’s report: — Yassine Elmandjra (@yassineARK) June 3, 2022 In
our first article about “The Bitcoin Monthly,” we defined it as:
“Over at Twitter, ARK Analyst Yassine Elmandjra described “The
Bitcoin Monthly” as: “Starting this month, ARK will be publishing
an in-depth report covering Bitcoin’s market action and sharing
where we think the market’s headed.” On ARK’s website, they
describe the new venture as: “Considering the market’s fast pace of
change, ARK publishes The Bitcoin Monthly, an “earnings report”
that details relevant on-chain activity and showcases the openness,
transparency, and accessibility of blockchain data.” BTC p-
S&P500 Correlation | Source: “The Bitcoin Monthly” ARK On
Bitcoin’s Correlation With The S&P 500 When the Russia/ Ukraine
conflict started, it seemed like bitcoin was not in synch with
traditional markets anymore. However, the tide quickly turned. By
May, “Bitcoin’s correlation with the S&P 500 reached an
all-time high of 80%.” The previous ATH was way back in October
2020, near that magical time when bitcoin woke up from a hundred
years’ nap to pass the $20K line for the first time. "If your
time horizon is one month, Bitcoin looks like a volatile asset. If
your time horizon is 10 years, it looks like a risk-off store of
value." – @saylor I couldn't agree more. — Dr. Jeff Ross (Pleb
counselor) (@VailshireCap) June 15, 2022 So, what’s ARK ‘s take on
the situation? Well… “Based on fundamentals, we believe bitcoin and
most equities should not be highly correlated, highlighting a
potentially significant market inefficiency.” A “significant market
inefficiency” is an investor’s wet dream. It means that you’re
seeing something that the market’s not. It means opportunity. If
you play your cards right, it could mean money. How to use that
“significant market inefficiency” in your favor, that’s another
question altogether. Take into account that “Bitcoin still faces an
uncertain macro environment, as the global economy shows signs of a
recession,” though. Let’s also take into account these recent words
by MicroStrategy’s Michael Saylor, “If your time horizon is one
month, Bitcoin looks like a volatile asset. If your time horizon is
10 years, it looks like a risk-off store of value.” Apparently,
bitcoin traders suffer from high time preference. And that probably
explains the correlation with the S&P 500. BTC price chart for
06/16/2022 on Binance | Source: BTC/USD on TradingView.com Arcane
Research Weights In ARK isn’t the only game in town. Our friends at
Arcade Research have the most recent information regarding
bitcoin’s correlation with the S&P 500, “BTC followed U.S.
markets closely on Friday and, in extension, also during this
weekend. However, as prices plummeted, new ghosts emerged, and the
dangers of impactful insolvencies have contributed to further drag
on the crypto market,” they say in “The Weekly Update’.” When
Arcane Research says “ impactful insolvencies,” they certainly
refer to the Celsius case. “While the crisis in Celsius has
contributed to putting a further drag on the market, the initial
catalyst was the inflation surprise in the U.S. We note a decline
in the 90-day correlation between BTC and S&P 500. However,
short-term correlations grew heavily following Friday’s inflation
news – with the market preparing for more hawkish policies enacted
by the FED.” The fact of the matter is that bitcoin’s price is
determined at the edges of the network. And high time preference
people are trading there. And if they want to treat bitcoin as a
risky asset, there’s nothing anyone can do about it. Except,
somehow, taking advantage of the opportunity it brings. Featured
Image by Sergei Tokmakov Terms.Law from Pixabay | Charts by
TradingView and “The Bitcoin Monthly”
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