Bitcoin’s correlation to traditional assets raises red flags

Quick Take

• As the market digests all the uncertainty from the banking fallout, equities such as the S&P 500 remain flat for March.
• In recent weeks, in light of the SVB collapse, Bitcoin had uncorrelated itself from the traditional markets.
• Bitcoin was up 24%, other assets remained relatively flat, and gold was also a winner.
• But in recent days, the correlation to assets has spiked back up to almost February levels.
• Bitcoin has a negative relationship with the dollar, which would be bearish if the dollar was to start going higher in the face of a liquidity or credit crisis as investors rush to dollars.
• Correlation is a topic CryptoSlate will be analyzing on a day-to-day basis amid market uncertainty.

Correlation YTD

• SPX: 0.74
• Nasdaq: 0.92
• Gold: 0.95
• TLT: 0.50
• DXY -0.81

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