Bitcoin Is Macro, but Not ‘Correlated’ in the Way You Think


Before we start looking at charts that tell a different picture, let's consider what correlation is and why we care.

The figure below illustrates that, up until the 60-day BTC-S&P 500 correlation passed zero on the way up,

Prices decreased everywhere, and the 60-day correlation between bitcoin and the top stock index reached an all-time high of 0.72.

The increase in correlation was not due to bitcoin being a "Macro asset" - bitcoin's entry into ordinary portfolios had been more gradual.

Bitcoin is a macro asset in the sense that it has now entered the global market. Not all macroassets, however, are highly connected.

The subsequent fund movements are likely to alter correlations and narratives, generating fresh momentum that affects correlations even more.