Fundamental correlations between bitcoin and other global financial asset classes have tended to shift over longer time periods, and by data, are not as established as correlations between more traditional asset classes.
Exampli gratia, we know the strong inverse correlation between USD and gold, that is well documented and reliable. In this article we gathered data from multiple sources to get a holistic view on bitcoin’s correlation between S&P500, gold, and different indexes, during first quarter (Q1) of 2019. As bitcoin grows as a global asset class, the correlation data will be one of the essential indicators we’d all be following.
There’s a clearly growing demand for safe havens as risk sentiments change. During market cycles and situations like: Turmoil, macroeconomic concern, or geopolitical risk, investors are eager to reallocate into the perceived safety of “safe haven” assets like bitcoin. As a decentralized digital currency that is, by definition, entirely independent from any single central bank, economy, government, or political party, bitcoin has a very real potential to serve as the perfect hedge for traditional assets, i.e. digital gold.
“Bitcoin has an asymmetric return profile — there is much more upside than downside in owning the asset. The downside is capped at the total amount of capital invested, yet the upside is ~100X+.” -Anthony Pompilano.
