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Time to buy, 2 year high for the Bitcoin – S&P500 correlation

In an effort to better analyze Bitcoin, and especially fin the best way to buy the cryptocurrency, it is important to know when to buy. People follow different charts, indexes, commodities, stocks, bonds and currencies to determine the moment. The S&P 500, also called the S&P, is an index of the 500 largest companies on the different stock exchanges in the USA. It is important to remember that the US has something like 30 stock exchanges. It can be quite challenging to follow all these exchanges. There is therefore a separate cross-exchange index just looking at the 500 largest companies. You can speculate by buying index funds or similarly try to pick within the S&P. The index has given the great return of 9.8% since the start of the index back in 1926. That is quite the impressive number. 

If we look at the S&P and Bitcoin, we will note that their correlation has never been better in the last 2 years. This is a typical sign for buyers to buy Bitcoin. The market is called bearish when the market indicates to buy. In other words, this correlation is a bearish sign for the cryptocurrency market. The reason for this correlation is the current pandemic, which has sent the global stock markets straight down, and caused likely recession in most countries’ economies. When markets are going down, it is a sign to buy. The question is always what to buy when turbulence ride the markets. 

Time to buy

Several experts have now pointed out that Bitcoin data shows that when the correlation with the S&P 500 is high. The correlation between S&P and Bitcoin is generally high on major downturns in the cryptocurrency markets. It is therefore important to pay attention to all the different market mechanisms in front of you and not just the regular indexes. The cryptocurrency market has also become an indication on how willing investors are to invest and also an alternative investment place to the regular stock market. 

Investors coming back to Bitcoin

It is important to remember that cryptocurrency is definitely a confidence game. If you want to invest money you need to invest in something you believe in. As the markets are going through another downturn some doubt Bitcoin and other cryptocurrencies as dead. However, this is a statement that has been put forth in other situations where the market has gone through turmoil. However, investors are quick to forget and always interested in new avenues to make money than just stocks and bonds. 

Looking back at the last period, Bitcoin has been quite resilient as the asset recovered by nearly 80% in just one week. If you are interested in diversifying your portfolio, look towards Bitcoin as Bitcoin are looking more tempting now than in a long time. 

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