As an experienced crypto investor with a knack for deciphering market trends, I find Mike McGlone’s insights intriguing and relevant. The increasing Bitcoin-to-Beta correlation he mentioned is a game-changer for me. It hints at a new phase in the crypto market where Bitcoin might be more responsive to stock market dynamics and riskier assets.
Mike McGlone, a seasoned commodities analyst from Bloomberg Intelligence, has utilized his account on the widely recognized social media platform, often known as Twitter in the past, to disseminate some findings from the latest Bloomberg report.
This paper discusses fresh Bitcoin statistics following the latest record-breaking high in the value of the leading digital currency. It also covers shifts in both the Bitcoin market and, interestingly enough, the gold market, which is Bitcoin’s tangible counterpart.
“Bitcoin-to-Beta correlation is high”
McGlone posted on Twitter that at present, the relationship between Bitcoin (BTC) and the Beta factor is stronger than before. More specifically, over the past 60 days, BTC’s correlation with the S&P 500 index has climbed to approximately 0.60 – a level that has never been higher as it rises.
According to McGlone’s latest write-up, this trend could potentially be the reason behind the current rise in crypto prices. Notably, both this significant stock market index and Bitcoin have been experiencing a surge, hitting new highs repeatedly. Last week, Bitcoin breached $75,000, followed by $79,000, and today it has soared past $82,000, reaching a peak of $82,490 just a few hours ago.
The correlation between Bitcoin and the S&P 500 (S&P500) over the past 60 days is at an all-time high of approximately 0.60 when moving upward, indicating a strong relationship that may help us understand what’s influencing the crypto market. In contrast, gold’s correlation to beta is closer to zero as of Nov. 8, suggesting Bitcoin has a stronger association with traditional financial markets compared to gold at this time.
— Mike McGlone (@mikemcglone11) November 11, 2024
It seems that the stronger relationship might imply that Bitcoin is now more responsive to fluctuations in the stock market and high-risk stocks within it.
Meanwhile, Bloomberg’s analyst also points out that gold’s correlation with the stock market is negligible. In essence, this suggests that Bitcoin appears to behave more like a highly-leveraged version of a stock market index (beta) rather than a digital counterpart of gold.
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2024-11-11 19:17