Since the beginning of November, we have been tracking Bitcoin's impact on traditional markets. It's not about a trivial comparison of performance. Institutional investors are extremely interested in Bitcoin's claim to be a non-correlated, stable asset. As part of a guest contribution to € uro Fundresearch, CriptomonedaseICO addressed the question of whether Bitcoin and the highly correlated crypto market would be a good supplement to traditional portfolios. This question is for institutional investors to be interested in the crypto market, not so much for hoping for a new bull run as at the end of 2017.
To clarify the suitability for classic portfolios, an investor can look at different sizes. First, it would be interesting to see if and how strongly Bitcoin is linked to traditional markets. On the other hand, a stable asset is attractive for a long-term investment. The volatility of the asset does not have to be extremely low. But it should at least have a certain consistency over a longer period of time.
Therefore, in this article series we look at the correlation in the last month, a sliding correlation, a floating volatility and a sliding performance. The last three values are calculated for each day based on the last 30 days. As comparison assets from traditional markets, we look at the S & P 500, Dax and Nikkei indices, oil and gold.
How is the relationship between Bitcoin and traditional markets developing?
The coupling to XRP has dropped a bit, but a bit bigger than in March:
As in recent weeks, you can focus on Bitcoin compared to the traditional markets.
Correlation: Cryptocurrencies vs. traditional market
Furthermore, the Bitcoin price and the S & P 500 index are hardly correlated. The correlation to the Nikkei index is also very low, while the DAX and oil positive couplings exist. The strong anticorrelation to gold persists:
The situation is quite similar to that of last week. Gold continues to be anticorrelated to Bitcoin, the S & P 500 and Nikkei indices show little correlation, and the DAX and oil are correlated to Bitcoin:
Overall, the absolute mean correlation of bitcoins with other markets is 28 percent. She must share first place in terms of decoupling this week with gold. Taking into account compensation effects due to possible anti-correlation, the picture looks more extreme. Although Bitcoin's connection to the other markets is the second-smallest with 22 percent – closely followed by the Nikkei index, which currently has 25 percent coupling. The most independent asset is still gold, which has a correlation of only ten percent.
Medium performance bitcoins continue above all assets
Of course, the price explosion of April 2 was a reflection of volatility. Instantan shot her at 3.5 percent. At this level, however, she was able to keep herself stable:
Although Bitcoin was unable to extend the gap to other assets, the average daily performance remains well above that of the peers. While the S & P 500, DAX, Nikkei and Gold have more or less zero performance, oil has outperformed in the meantime. Currently, however, everything looks as if oil would like to join the dance around the zero line:
Despite the slight sell-off of recent days, Bitcoin has also been the best performing asset since the beginning of the year:
Oil and Bitcoin continue to go head-to-head
Looking at the cumulative performance since the beginning of the year, the situation has improved slightly since last week. Although investing in oil would have done even better, the gap has meanwhile dropped to a minimum. Even after the recent consolidation, the neck-and-neck race is not yet finalized. All other assets are clearly behind these two:
Bitcoin continues to be an attractive asset for institutional investors: its independence from the rest of the market, high but still manageable volatility and very good performance are undoubtedly reasons for institutional investors to take a closer look at Bitcoin.
Data used on April 5 by cryptocompare.com, finance.yahoo.com and fred.stlouisfed.org.
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Disclaimer: This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest. The opinions expressed in this article are those of the author and do not necessarily represent the views of CriptomonedaseICO , and should not be attributed to, CriptomonedaseICO .
