Bitcoin [BTC] Builds on Safe Haven Traits with Stock Market Decoupling


Bitcoin’s correlation with the stock markets has been a worrying signal for the investors as economists call out an extended U-shaped recovery in stocks.

Nevertheless, the trend seems to have broken away lately as the stock market gains seems to have capped below $3,000, while Bitcoin has continued to trade above $9000. The price of Bitcoin [BTC] at 4: 15 hours UTC on 7th May 2020 is $9301. Mati Greenspan, financial and crypto analyst, tweeted,

#Bitcoin (orange) has been surging while US stocks (blue) have been lagging for the last week.

stock market bitcoin
Bitcoin Vs. Stock Market Rise since the Black Thursday Crash (Source)

Volatility Vs. Emerging Currencies

Moreover, the economic frenzy brought about due to coronavirus and the consequent oil market crash, is also starting to favor the Bitcoin ‘safe-haven’ rhetoric. In comparison with oil and the emerging currency markets, Bitcoin has been stabler. Leading on-chain analyst, Willy Woo, tweeted,

Bitcoin is already the size of an emerging country. Its marketcap at $170b is already that of the 53rd country by GDP.

As recently reported on CoinGape, many of the oil exporting and under developed middle-eastern and Latin American countries have been battling severe economic downfall with hyperinflation.

bitcoin volatility
Bitcoin Price Volatility Against Other Assets (Source: Woobull

In the past, the volatility in the emerging currency markets have been comparable to Bitcoin twice. Tyler D. Coates, a prominent derivatives trader, tweeted,

Looks like this has happened twice since 2012. Last two times led to a selloff and then a bottom. This would line up rather nicely with a post #halving dump and then moon.

Furthermore, it can also be observed that the volatility increased in Bitcoin after the confluence in the last two times. With halving due within a week, the price action can continue to be volatile in the short term.

On Emerging Cryptocurrencies

Nevertheless, apart from Bitcoin [BTC], the other cryptocurrencies (excluding a select few) have been under-performing as well. The risk component in many of these cryptocurrency is far higher to invest during a recession.

bitcoin dominance
Bitcoin Dominance Percentage (Source)

Currently, BTC dominance over the cryptocurrency is facing resistance around the 68% mark, a break-out could target 70%. The momentum has been favoring the rise as well.

Which region will you see Bitcoin adoption earlier: developed countries or emerging nations? Please share your views with us.