Is Bitcoin Correlated with the Stock Market? The Answer, in Charts and Graphs – Bitcoin Market Journal

How are digital currencies like bitcoin correlated with traditional assets, such as stocks and bonds?

When stocks rise, does the price of bitcoin tend to rise or fall?

The consensus is that the correlation between bitcoin and stocks is weak.

In May, Bitwise Asset Management stated that bitcoin’s correlation with bonds was just 0.25. Bitcoin’s correlation with stocks was even lower, just 0.12.

“Historically, the correlation between the S&P 500 and bitcoin has been insignificant,” Blockforce Capital CEO Eric Ervin told in October.

Did this hold up in 2018?

Why Bitcoin’s Correlation to Stocks Matters

Bitcoin’s correlation to stocks (or lack thereof) may be one of its biggest selling points.

Wise investors generally try to diversify their portfolios to reduce risk. When one asset, such as stocks, falls, another type of asset, such as bonds, tends to rise or at least not fall as much.

Assets can be positively correlated (one rises when the other rises)  or negatively correlated (one falls when the other rises). They can also be uncorrelated (one does not move when the other rises or falls).

The correlation can range from -1 (perfect negative correlation) to 1 (perfect positive correlation).

If bitcoin remains uncorrelated or negatively correlated with stocks, investors may decide to invest in bitcoin to reduce risk.

Was Bitcoin Correlated with Stocks in 2018?

How was bitcoin related to stocks in 2018? Was there a strong correlation? If so, was it negative or positive?

In February, DataTrek Research noted that the 90-day correlation between bitcoin and the S&P 500 had reached 0.33, the highest since January 2016.

However, this relationship did not hold for the rest of the year. The chart above shows the returns for bitcoin and the S&P 500 stock index since January 2, 2018.

Both are down in 2018, but bitcoin has fallen a lot more. Bitcoin is down 72.16 percent since January 2, while stocks are down 12.79 percent.

Bitcoin and stocks were positively correlated in the first and fourth quarters; both fell, although bitcoin fell a lot more.

In the second and third quarters, the two were negatively correlated; stocks rose while bitcoin fell.

There was no clear relationship between bitcoin and stocks in 2018. Bitcoin’s correlation with stocks, 0.07, is very close to zero.

Looking Ahead

What will the relationship between bitcoin and stocks look like in 2019? Will Bitcoin remain uncorrelated with the stock market?

In recent weeks, bitcoin and stocks have moved in opposite directions. The S&P 500 is down 9.5 percent since December 13, while bitcoin is up 16.4 percent.

Bitcoin’s low prices might attract investors looking for uncorrelated assets in 2019.

Furthermore, bitcoin might do well in a downturn. In October, a Fundstrat survey found that 72 percent of institutional investors think the price of bitcoin could rise during a recession.

Bitwise’s head of research, Matt Hougan, told in August that he expects the correlation between stocks and bitcoin to remain low.

If you want to learn more about investing in bitcoin, subscribe to the Bitcoin Market Journal newsletter today.

The Daily: Best Selling Authors Introduce Bitcoin to Followers – Bitcoin Mashup

In the first edition of The Daily for 2019, we feature two best selling authors from outside the cryptocurrency community that recently used their social media reach to introduce the idea of Bitcoin to their numerous followers. Tony Robbins simply wants his readers to know “what the heck is bitcoin,” and Jordan Peterson explores crypto donations to avoid possible censorship by the likes of Patreon, Paypal, Visa or Mastercard.

Tony Robbins Explains Bitcoin to His Followers

The Daily: Best Selling Authors Introduce Bitcoin to FollowersTony Robbins is a popular motivational speaker who published four best-selling self-help books. He recently sent out a link to an article on his website to his over three million followers on Twitter promising to explain, “What the heck is bitcoin, and how does it work?”.

The article, which was written by Team Tony back when the price of BTC was at $9979, introduces cryptocurrency as a brand new concept. It uses simple language rather than insider jargon to make the somewhat complex subject accessible to a boarder audience.

“Bitcoin is decentralized,” the article explains. “No single bank, government, company or individual owns the network or has control over it. This means that your accounts can never be frozen, a government cannot devalue the currency, it can be used in every country, and, more ominously, because of the anonymous nature of bitcoin, the technically savvy can avoid taxation and use bitcoin as payment for any kind of illegal good or service.”

What the heck is bitcoin, and how does it work? Find out here.

— Tony Robbins (@TonyRobbins) December 30, 2018

Jordan Peterson Goes Further Down the Rabbit Hole

The Daily: Best Selling Authors Introduce Bitcoin to FollowersJordan B. Peterson is a clinical psychologist and professor at the University of Toronto whose last book sold around 2 million copies around the world during 2018. He recently became alarmed about the power Patreon has over many public figures on Youtube who depend on it for securing their livelihoods after the crowdfunding platform banned without warning a video creator with over 800,000 subscribers.

Peterson, who has a following of over 1.7 million subscribers on Youtube himself, begun looking for an alternative to Patreon and for now simply added a BTC address for donations on his site. “Time magazine praises Bitcoin as a potential bastion of freedom,” Peterson twitted, linking to an article by a human rights activist that explains how cryptocurrency can help people retake control of their lives from oppressive governments.

“Further down the rabbit hole,” Peterson later added. “Why are MC/Visa/PayPal/Patreon transforming themselves into censors? They have decided to fight ‘hate speech.’ But, the crucial question–the Achilles heel–remains: who defines hate? Answer: those to whom you would least want to grant such power.”

What do you think about today’s news tidbits? Share your thoughts in the comments section below.

Images courtesy of Shutterstock.

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Why Bitcoin, Ethereum and the Entire Crypto Market Are Down in Value | Bitcoin Insider

An opinion article on why the market is falling down

The views expressed here are the author’s own and do not necessarily represent the views of

The way I see it, investors in 2017 — and specifically in Q4 — wanted to buy Bitcoin (BTC) and Ethereum (ETH) for the sole purpose of exchanging it for specific ICO tokens they wanted to invest in. The buyers of Bitcoin and Ethereum did not want to own Bitcoin or Ethereum. They wanted to buy the newly issued initial coin offering (ICO) tokens, but they needed to buy Bitcoin and Ethereum as a short way to get what they ultimately wanted. The owners of Bitcoin and Ethereum did not want to sell. They were watching the price of their holdings increase, so why would they? They were also believers in Bitcoin and Ethereum. So, in a “bid-ask world,” the price went up.

Then, those startup companies that completed their ICOs became whales, which began — as a group — to unload their tokens in December and January, thereby flipping the dynamic of the huge demand for Bitcoin and Ethereum to all sellers of Bitcoin and Ethereum. After the New Year’s hangover faded, the startups needed to exchange their crypto for fiat in order to pay engineers and build their startups.

Then, it was a run-on-the-bank panic. Pressure from the United States regulators in Q3 and Q4 of 2017 resulted in a slowing and near total halt of ICOs by early 2018. After that, ICOs either stopped or radically slowed. New token issuers began to accept fiat without the need to pass through Ethereum, which killed more demand and left only sellers and “hodlers” and no buyers. In a “bid-ask world,” the market tanked. An interesting dynamic of the current market is that the prices of all cryptocurrencies are highly correlated to each other. Just look at the price of any token on CoinMarketCap, and you will notice a perfect correlation among the prices of most of them. Bitcoin and Ethereum go up and down together, and most other tokens are correlated in the same way. It shouldn’t be that way, but without any banks analyzing and reporting on these startups — the way they do for Apple, Amazon, Microsoft, etc. — that’s the way it is for now. So, Bitcoin can raise or drop the price of your token, but it now appears that gravitational pull works in both directions.

In 2018, something else developed. It became clear that all of these funded ICOs were not diligenced by real tech experienced angels or VCs — they were mostly not tokens you would really want to invest into. Previously, all of these coins were correlated to the rising price of Bitcoin and Ethereum, but now it is dragging them down. They are all correlated, and the big section of the overall market cap is sinking the ‘crypto ship’ in general.

What will happen is that all of these weak startups will eventually be flushed out, and we will be left with some decent and even amazing companies. Today, the consumer retail investors of Southeast Asia and around the world are no longer gambling and throwing cash at the latest ICO to pitch at some blockchain event — or at least not at the volumes of Q4 2017. It used to be 20 percent institutional (VC) investors and 80 percent retail. Now, it’s 80 percent institutional investors, if not more. It makes sense to me that, if strongly branded VCs like a16z, Pantera Capital and 7BC.VC invest into a startup from their wide funnel of investments after conducting VC-grade due diligence, consumer retail investors will want to invest — following the VC’s lead in jurisdictions where this complies with local securities law (or, in the U.S., if the startup filed an S1, Reg A+, etc.).

Now is the time for the arrival of experienced VCs to raise real VC funds, generate large volumes of deal flow, process that deal flow with fully centralized and decentralized teams qualified to conduct proper due diligence, fund the best ones, as well as help these portfolio companies execute and manage investor risk via diversification and portfolio construction. We have seen a return to sane equity funding — and not just for tokens. Investors now own equity and tokens. Some “pure play” decentralized cases require only tokens — but again with real, old-school due diligence — before just throwing money around. We are also seeing a return to market valuations, rather than a team of high school dropouts seeking a $50 million or $100 million pre-money valuation without ever having met a payroll or accomplish any substance prior to getting that kind of valuation.

The new companies to be funded in 2019 — and to be listed in 2019, 2020 and 2021 — will be far better on average than the 2017 cohort, resulting in a rebound in the market. Experienced VC-backed entrepreneurs are now working on blockchain startups, which means the population of management teams has evolved beyond the original Bitcoin anarchists.

Bitcoin itself is resilient, proven by its survival of multiple Mt. Gox-type events and numerous up-and-down cycles. The long-term curve for Bitcoin is up and to the right. After the infamous coins run out of cash and disappear, the market will become much more robust. Many of the managers became delusional due to their experience of traveling the world and completing their ICOs, thinking that BTC and ETH would only go up and up while failing to exchange enough of their crypto for fiat. Not only did they have startup risk, but they foolishly added FX (foreign exchange) risk.

So, the good news is that these weak, never-should-have-been-funded startups will run out of cash sooner than expected, because their crypto is worthless when converted to fiat than they thought at the time they completed their financings. The flushing out of these coins currently weakening the market will drive the market up. Today, startups exchange their crypto into fiat the moment they get it.

I also predict that we will see a few killer startups take off and generate mass adoption, which will bring mainstream users into the crypto world and — in a gravitationally correlated world — this will lift the tide of the entire market. We will probably see some video game become a huge sensation — like Angry Birds — or something that will drive the adoption of a token. I expect to see something else come along that no one ever thought of — like Skype — that everyone begins to use, which will pull huge populations into the crypto world, as the value will just simply be there.

It is imperative that all businesses move onto the blockchain so that no party can tamper with the numbers of how many “widgets” were sold or with who gets paid what. All business, government and health care data should be on the blockchain — and pretty soon, it will be unacceptable without it to enter into a business agreement and trust the other party to tell you how many widgets were sold in China, the U.S. or Africa. Once these business transactions or elections are on the blockchain and no one can tamper with the data, all sides can trust each other. The big picture here is that the market will see a major rally and long-term trend up and to the right.

2019 might be an excellent time to invest in a blockchain-focused VC fund or invest into blockchain startups taking on-board lessons from top-performing VCs that have a strong entrepreneur-experienced investment team with experience in achieving top-quartile venture capital IRR performance and cash-on-cash performance.

Andrew Romans is a Silicon Valley-based venture capitalist at 7BC.VC and Rubicon Venture Capital as well as an author of two top-10 books on Venture Capital on Amazon and Masters of Blockchain.


Best Bitcoin and Cryptocurrency Tweets from 2018 – Bitcoin Market Journal

Finding solid sources of information about bitcoin and altcoins can be tricky at times. Of course, you always have our unbiased and heavily researched information here at Bitcoin Market Journal.

Other great sources of information are Reddit and, of course, Twitter. The only issue with Twitter is that everyone claims to be a crypto influencer or thought leader, even if they’ve only recently come to crypto.

Putting that aside, there are some real gems to be found on Twitter, if you’re following the right crypto influencers. These are the people who have a real influence on the growth and adoption of bitcoin and other altcoins, and they are actively building the communities that will support further growth.

With that in mind here are some of the top tweets of 2018 from top crypto influencers.

Vitalik Buterin

You have likely already heard of this college dropout and founder of Ethereum. If you have any interest in blockchain technology, you should be following him. Interestingly though, it’s been his tweets against scammers that have generated the most interest in 2018.

I am boycotting @coindesk‘s Consensus 2018 conference this year, and strongly encourage others to do the same. Here is my reasoning why.

1. Coindesk is recklessly complicit in enabling giveaway scams. See their latest article on OMG, which *directly links* to a giveaway scam.

— Vitalik Non-giver of Ether (@VitalikButerin) April 26, 2018

If you follow Vitalik Buterin, you are almost guaranteed some mind-blowing tweets and tweet-storms discussing decentralized applications, security, scalability, ICOs, and even the economics of blockchain and crypto.

Laura Shin

Laura Shin is a journalist who focuses on blockchain technology, use cases, and altcoins. Many of her tweets are to point you back to her informative podcasts and She has also given some excellent TEDx talks, and she was previously a senior editor for Forbes. There is always something objective and well-informed to be found in her Twitter stream.

Tuur Demeester

The tweets of Tuur Demeester will give you a fair and balanced look at the crypto scape. It is a breath of fresh air in the often hyped up Twitter-sphere. Expect solid economic data and technical analysis of the markets.

Bitcoin is digital gold in the eyes of a growing subset of the population. To some extent this group already operates on a Bitcoin Standard: investments are evaluated on their ability to yield a return in Bitcoin.

— Tuur Demeester (@TuurDemeester) July 27, 2018

Charlie Lee

Charlie Lee is the creator of Litecoin, and while his Twitter account is often focused on Litecoin, he has also been known to tweet on controversial crypto issues. His Twitter feed might be considered to be on the opposite side of the spectrum from Tuur. Where Tuur is balanced, Charlie has been accused of being somewhat over-the-top in his tweets, but he is also followed by 800,000 people on Twitter, making him a top influencer.

Bitcoin Satoshi Vision is the real Bitcoin Cash.

Karma’s a BCH. 😂

— Charlie Lee [LTC⚡] (@SatoshiLite) November 8, 2018

Vinny Lingham

Vinny Lingham is the founder of Civic, the secure identity blockchain, and an entrepreneur in the blockchain space. His insightful comments regarding blockchain technology and the crypto ecosystem are well worth following. He also has a Medium blog where you will find him go into deeper detail regarding blockchain tech and security.

When the Blockchain tourists finally give up on the “big opportunity”, the rest of us left behind will continue to build out the infrastructure for the next wave. Reminds me of the post 2000 tech collapse…all the non-believers went back to their non-tech jobs.

— Vinny Lingham (@VinnyLingham) March 28, 2018

Fred Ehrsam

From an investor’s perspective, Fred Ehrsam is one of the best personalities to follow on Twitter. A former Goldman Sachs trader, he was one of the co-founders of Coinbase. Lately, he has become increasingly interested in how blockchains will influence gaming since it is one of the largest growth areas of our generation. His take is that in 10-15 years, some people will be able to live off the income made from blockchain gaming.

In Conclusion

Twitter’s data from 2015 (the last time they divulged) says there are 500 million tweets per day, so there are many other great tweets and tweeters out there. You can find many of them on our list The Crypto 50: The Top Influencers in Bitcoin and Blockchain 2018.

Another easy and painless way to stay abreast of what is happening in the bitcoin and blockchain universe is to subscribe to the Bitcoin Market Journal newsletter.  Why not do that today?