Bitcoin's Correlation to S&P 500 Hits 17-Month High

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Bitcoin's Correlation to S&P 500 Hits 17-Month High
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The 90-day correlation between bitcoin and the S&P 500 has risen to its highest level since October 2020, reigniting the perennial debate of whether bitcoin is a haven asset or a risky investment. By godbole17

The perennial debate of whether bitcoin is a gold-like haven asset or a risky investment may heat up as the cryptocurrency's sensitivity to stock markets has increased amid concerns that the Federal Reserve's aggressive tightening plans may tip the U.S. economy into recession.

The correlation has strengthened alongside a relentless tightening of the U.S. Treasury yield curve, a sign the Fed may have a hard time avoiding much-feared stagflation with rapid-fire interest rate rises without destabilizing the economy. The yield curve, represented by the spread between the 10- and two-year yields, is now just 20 basis points short of inversion, a recession indicator.

"What I am interested in is the change in bitcoin and change in Nasdaq and what you find is the correlation is over 60%," Chandler said."The stock market [has been] going bid."

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