In response to a report printed by The Block, on March 28, 2020, premier cryptocurrency Bitcoin (BTC) continues to battle to determine its “safe-haven” standing amid the continuing monetary disaster courtesy of the devastating COVID-19 pandemic.
Bitcoin “Protected-Haven” Standing a Distant Dream?
Launched in a bid to not enable an encore of the 2008 monetary disaster like scenario, Bitcoin, for lengthy, has been touted because the “safe-haven” for funding in instances of peril, a lot akin to gold. The primary and the most important cryptocurrency when it comes to market cap, Satoshi Nakamoto’s Bitcoin was launched in the direction of the top of the spectacular fall of Lehmann Brothers Co.
Since then, a significant USP of BTC has been its perceived uncorrelated relationship with conventional fairness markets. Nonetheless, in keeping with new analysis by The Block, in latest instances, Bitcoin has been comparatively correlated to the fairness market. That is attention-grabbing, as in keeping with information from earlier this yr, the correlation between Bitcoin and the S&P 500 index began was certainly destructive.
For the uninitiated, the worth of the correlation between Bitcoin and fairness market refers back to the path of motion the 2 markets transfer in. For instance, a constructive correlation would imply that the 2 markets would transfer in the identical path. Conversely, a destructive correlation implies an inverse value relationship between the 2 markets, i.e., they transfer in reverse instructions.
The report by The Block, reads partially:
“Going into March, nevertheless, it entered into the constructive vary and reached a excessive of 0.32. The contract between the destructive correlation in Jan. and the constructive one in March. – each statistically important – reveals an attention-grabbing growth.”
(Supply: The Block)
The Constructive Correlation Might Disappear Quickly
The Block researcher, Larry Cermak, added, nevertheless, that the present correlation isn’t sufficient to show that the 2 markets will at all times essentially transfer in the identical path. Cermak mentioned that the correlation between the 2 markets can disappear simply as rapidly because it confirmed up. He, nevertheless, additionally added that there isn’t any indication of that occuring as of but.
In comparable information, BTCManager reported on March 23, 2020, how the COVID-19 pandemic might act as a litmus take a look at for the long-heralded safe-haven standing of Bitcoin. Whether or not it holds true in the long term, solely time will inform.
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