Experts have different opinions about the future of Bitcoin prices. Each influencer has different views about the cost of Bitcoin.
These people’s opinions and statements determine the future prediction of the cost of Bitcoin. Of course, many people express unusual and sometimes unimaginable numbers about these predictions. Some also consider Bitcoin to be obsolete in the future.
Of course, you should rely on something other than unconventional and incorrect predictions because many of them need to be attainable. They often need to be expressed according to the necessary statistics and investigations. For this reason, it is better to follow the predictions of people who have the knowledge required in this matter and announce the future price of Bitcoin according to numbers, figures, and specific reasons. To know why Bitcoin follows the stock market?”, please follow Antidolos for more Crypto prices and analysis to the end of this article.
Antidolos can predict the future?
For many people, predicting the future price of Bitcoin is very important. Especially for those who want to invest in this digital currency, market fluctuations and external factors affecting the price of Bitcoin are very important. However, We believe that Bitcoin follows the stock market! It acknowledged that some of the following claims are logical and others are illogical, and by studying them, you will find out whether they are impossible.
When Bitcoin (BTC) was first introduced, many people thought that one of its advantages was that it was not related to the stock market. Investors hoped Bitcoin would be a suitable hedge – a safe place to protect funds against stock market volatility.
However, with the rise in popularity of this digital currency, many people are starting to wonder if Bitcoin has anything to do with the stock market. Is Bitcoin price influenced by the stock market – and is that a good thing? Check out our guide to learn more about how Bitcoin follows the stock market.
The history of Crypto and Bitcoin follows the stock market
For the first few years of its existence, there was almost no correlation between Bitcoin and the S&P 500. Until 2012, the price of Bitcoin was very stable, while the costs of the S&P 500 continued to rise with some declines. Bitcoin’s first significant surge, in late 2013 and early 2014, had no corresponding rise in the S&P 500. The stock market crash of late 2016 happened at the same time the price of Bitcoin rose.
The cost of Bitcoin fluctuated rapidly, while the S&P 500 was less volatile. The peaks and valleys of the Bitcoin price and the S&P 500 showed almost no similarities until 2018.
However, a recent chart shows that Bitcoin follows the stock market and offers a much higher correlation. The value of crypto does not fully reflect the S&P 500 index. However, a comparison of Bitcoin and the S&P 500 indicates some relationships.
Be prepared for any Crypto behaves
We can understand this by looking at how Crypto behaves during the S&P price swings. Also, reading the article warning about NFT airdrop scams will help you understand the concept of digital currency.
Over the past four years, Bitcoin has begun to mimic the movements of the S&P 500 somewhat. During the big drops of January 2018, September 2018, and March 2020, the price of Bitcoin also fell. Interestingly, the charts of Bitcoin versus the stock market show that Bitcoin’s decline looks even more severe. While the S&P typically only experiences drops of about 10%, Bitcoin has seen falls of more than 50%.
Over the past three years, Bitcoin’s turnover rate has also increased as stocks have risen. In general, Bitcoin and stock market charts correlations are strongest when stock prices fall. However, Bitcoin seems to follow the prevailing market trends of stable and rising stocks. Bitcoin has recently started mimicking the stock market. In March, Bitcoin and the 90-day S&P 500 correlation hit record highs. As of 2022, there is no sign that Bitcoin follows the stock market splitting.
Bitcoin vs Stock Market Charts: What We Can See
Bitcoin’s correlation with the stock market is even more striking when you take a close look at the combined prices of Bitcoin and the Nasdaq over the past four years. Here are some key examples of how Bitcoin is related to the stock market, based on Bitcoin vs Stock Market Charts.
- December 2018: Both Bitcoin and Nasdaq hit new lows. Bitcoin hits $3,689 while the Nasdaq hits $6,192.
- June 2019: Bitcoin and the Nasdaq both experienced a sudden and extreme price spike.
- February 2020: Bitcoin and the Nasdaq hit three-month highs before falling sharply.
- March 2021: Bitcoin and Nasdaq rise to exceptional levels.
- October 2021: After months of holding high prices, both Bitcoin and Nasdaq prices began to decline and recovered at the end of the year.
- November 2021: Starting in November, Bitcoin’s correlation with the stock market becomes even more vital. Since then, crypto has followed the movements of the Nasdaq in almost the same way that crypto-mining stocks have risen in popularity.
- May 2022: Bitcoin and the Nasdaq experienced significant price drops, followed by a slight rally. At this point, Bitcoin mirrors even the tiny movements of the Nasdaq. Do you still believe Bitcoin follows the stock market?
What Causes Bitcoin Stock Market Correlation?
There is no single reason why Bitcoin is related to the stock market. Instead, based on the Bitcoin vs stock market charts, several factors play into the similarities. Like the stock market, Bitcoin is affected by supply, demand, and investor sentiment. Prices rise when there is high demand, a positive market outlook, and limited supply. Meanwhile, prices for both fall when investors worry about the future or face troubling economic policies. So, it is no surprise that Bitcoin is going up and down in the stock market. To know what the future price of Bitcoin will be like, please follow Antidolos ICO rating and review for more reading, refer to the article’s high-technology definition.
Benefits and risks of high stock market correlation
Are you curious about the correlation between Bitcoin and the S&P 500 for the average investor? Bitcoin follows the stock market or Bitcoin stock market correlation has advantages and disadvantages. If there is a strong Bitcoin correlation, investing in Cryptocurrency becomes much more predictable. When Bitcoin and stock market charts are similar, you can easily spot market trends and make intelligent choices. Additionally, since stocks always increase in value over the long term, Bitcoin’s connection to the stock market could mean more significant long-term gains for Cryptocurrency investors.
Will Bitcoin break away from the stock market?
If your investment strategy focuses on Bitcoin after the stock market, you should watch out for the Bitcoin stock market split. Experts predict that such an event is unlikely to happen anytime soon. As more people integrate Bitcoin and stock market charts, the two assets will influence each other even more. At least a mild correlation with the stock market appears to persist through the end of the year.
That expressed, some degree of unbundling of the Bitcoin stock market seems inevitable. The main reason is that Bitcoin is more volatile. In a sell-off situation, the price of Bitcoin falls slightly more sharply than traditional stocks and recovers firmly. With the outlook for stocks looking bleak for the second half of 2022, there may be signs that Bitcoin’s value will begin to fluctuate at different rates than that of stores. For more information, refer to Antidolos experts. Do you want to know about Blockchain Gaming 2023? Refer to this article.
It’s a fact: nothing is predictable
When investing, it is essential to avoid the assumption of correlation causation. The fact that the charts of Bitcoin and the stock market look very similar does not necessarily mean that one call strongly influences the other. Sometimes, the connection between Bitcoin and the stock market seems coincidental. For example, the March 2019 fall in the stock market was due to increased aluminium tariffs, while the March 2019 fall in Bitcoin was due to an international crackdown on digital currencies.
Final words about how Bitcoin follows the stock market?
However, there is also much evidence that Bitcoin may be directly affected by the stock market. Experts have noticed that the price of Bitcoin tends to fall when the stock market opens – regardless of other factors affecting the price. In addition, the cost of Bitcoin influenced general investor confidence, which is why recent Bitcoin crashes have followed stock crashes. Crypto traders who start hearing news of a stock market downturn tend to start trading conservatively. Please refer to our website experts for Crypto and Bitcoin market forecast in 2023“.