Learn Concept: The Correlation between Bitcoin and Equities' Performance

By: Isha Das

The concept we delve into today is the correlation between Bitcoin (BTC) and equities performance. This correlation reached 0.17 last week after marking a multi-year low of 0.01 in March. The shift may be traced to a sell-off of risk assets in April, likely due to macroeconomic headwinds and geopolitical tensions. It's important to highlight that despite the rise, Bitcoin's correlation with risk assets remains below its high of 0.6, observed during bull markets.

Beyond the correlation, we also see standout trading volumes in the Brazilian crypto market. From January to early May 2024, Brazilian real (BRL) trading volume came close to a massive $6 billion, indicating the largest Latin American crypto market. The BRL trading volumes saw a 30% growth from the previous year, surpassing US dollar trading volumes.

The relevance of these developments is multi-layered. Key metrics such as the correlation between equities and Bitcoin, along with trading volumes, give crypto traders necessary data to inform their trading decisions.

Anticipated volatility following decisions by the US SEC on spot Ethereum ETFs and the release of US Consumer Price Index (CPI) data will all potentially impact Bitcoin's price movements. All traders must remain vigilant of trends and updates in the global macroeconomic space.