Bitcoin (BTC), the largest and most popular cryptocurrency in the market continues to behave like stocks. The correlation between Bitcoin and the S&P 500 has reached new highs in recent days, showing that Bitcoin remains a risk-on asset.
Bitcoin Behaves Similar to Stocks
This year has been a volatile one for Bitcoin and for traditional investors. Indeed, the cryptocurrency followed very closely the general trend of the stock market before and after the Coronavirus crisis. The same happened for many other digital assets that are currently operating in the market.
According to data provided by the crypto analytics company Skey, the Bitcoin and S&P Realized yearly correlation is close to 38.1%. Meanwhile, the monthly correlation is even higher, surpassing 78.8%. This shows the traditional financial market and the cryptocurrency space (at least represented by Bitcoin) are increasing their correlation.
This could be related to the fact that Bitcoin is being more attractive to traditional investors and that they are finally here among us. Nonetheless, this can also mean that Bitcoin is not being seen as a store of value or as an asset to hold, but rather to speculate with as its price fluctuates. Despite that, over time, the price of Bitcoin has been fluctuating less and less.
Bitcoin and Altcoins Surge
In recent weeks, we have seen how Altcoins started growing once again after many months in which they were traded downwards. Some of the virtual currencies that behaved very well included Crypto.com (CRO), Chainlink (LINK), Stellar Lumens (XLM), Cardano (ADA), Tezos (XTZ) and Bitcoin SV (BSV), among others.
This shows that there could be a growing interests for some virutal currencies and that this could push the price of many digital assets higher. During this time, Bitcoin registered lower gains, close to 2% and 3%. The aforementioned altcoins have been expanding at rates higher than 10% in many cases.
At the time of writing this article, Bitcoin has a market dominance of 62.6% down from 68% some months ago. At the same time, each BTC can be purchased by investors for $9,250 a price that has been traded in a tight range between $8,800 and $9,400.
Now, the entire crypto market is waiting for a new bull run that would allow Bitcoin to surpass previous highs (in June 2019) and eventually move higher towards $20,000 and even higher. Regarding the altcoin market, it may follow the general trend of virutal currencies in the coming months.