Bitcoin’s correlation with the S&P 500 reaches its highest level in 2 years – what does this mean for investors

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Bitcoin price has recorded another positive performance over the past seven days, looking to end the month and start October on even stronger footing. Continuing its rally over the past few weeks, the top cryptocurrency surged as high as $66,000 on Friday, September 27.

The latest data shows that there may be a growing correlation between the performance of the US stock exchange and the value of the world’s largest cryptocurrency. The question is – how might this affect investor behavior?

How did Bitcoin and the S&P 500 perform in September?

In a recent post on Platform X, crypto intelligence firm IntoTheBlock revealed the correlation of the Bitcoin price with the S&P 500 index, one of the most popular stock indices, has reached its highest level in over two years. For transparency, the S&P 500 index tracks the performance of the 500 largest publicly traded companies in the United States.

Bitcoin’s price posted surprisingly positive results in September, a month that has been historically bearish for the flagship cryptocurrency. According to CoinGecko data, the value of BTC has increased by over 11% over the last month.

Source: IntoTheBlock/X

Meanwhile, the S&P 500 index has made a quick and sturdy rebound, reaching a recent all-time high after an initial decline earlier this month. TradingView data shows that the index increased by almost 4% in September.

The relationship between the stock market and the cryptocurrency market has always been intriguing as investors look to capitalize on the opportunities that either market offers. However, the sturdy correlation between these two asset classes is believed to limit the diversification opportunities they offer to investors.

At the time of writing, Bitcoin is trading at around $66,024, reflecting just a 1.1% gain in the last 24 hours. Meanwhile, the S&P 500 continues to hover around 5.8K, up 0.4% over the past day.

Global liquidity augment by $1.426 trillion in one week

Popular cryptocurrency expert Ali Martinez took to the X platform participation that there has been a noticeable augment in the volume of capital on global financial markets. Data provided by Martinez shows that global liquidity increased by $1.426 trillion last week.

Bitcoin and other risky assets are the main beneficiaries of rising global liquidity as their value has increased due to increased capital inflows. Martinez also noted that this augment in liquidity could carry over into October.

Bitcoin

The price of BTC breaks above $66,000 on the daily timeframe | Source: BTCUSDT chart from TradingView

Featured image from iStock, chart from TradingView

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