Why bitcoin is surging again

Just sidetracking a moment off bitcoin subject....

Correlations are interesting and most stocks are reasonably closely correlated to the indexes and sectors.

But below is a chart of Gold price USD (black) vs GDX large cap gold stocks (green) and GDXJ gold juniors (orange).

^XAUUSD_Barchart_Interactive_Chart_11_26_2023.png


What you'll notice is over 3 years, XAUUSD has risen 7%, Seniors have fallen 19% and juniors have fallen 32%.
So then the next query is if gold price has risen and stocks fallen, are they positively correlated. :)
 
GlobalMacro90 said:
The correlation between BItcoin and QQQ and bitcoin and SPY is zero over the last three months,
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You are a blind idiot. You could argue for a less than 95% correlation, but saying it is zero is just dumb. BITO was a bad example (my bad) because it didn't actually follow BTC's price movement.

But for the blind's sake let's compare the SPX and BTC charts for the year:

Late winter high:

SPX first week of Feb
BTC first week of Feb and 3rd week of Feb

Spring low:

SPX mid March
BTC mid March

Summer top:

SPX end of July
BTC mid July

Autumn low:

SPX end of Oct
BTC mid Sept to mid Oct

Rally into winter:

SPX done
BTC done

If that is zero correlation for you, well, I have an optometrist for you...
 
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Pekelo said:
You are a blind idiot. You could argue for a less than 95% correlation, but saying it is zero is just dumb. BITO was a bad example (my bad) because it didn't actually follow BTC's price movement.

But for the blind's sake let's compare the SPX and BTC charts for the year:

Late winter high:

SPX first week of Feb
BTC first week of Feb and 3rd week of Feb

Spring low:

SPX mid March
BTC mid March

Summer top:

SPX end of July
BTC mid July

Autumn low:

SPX end of Oct
BTC mid Sept to mid Oct

Rally into winter:

SPX done
BTC done

If that is zero correlation for you, well, I have an optometrist for you...
More...

do you know a correlation is? Do you know how it’s calculated? I beg you just do the math or just look at a plot of the rolling correlation of bitcoin to any stock market over any rolling time frame of the last 18 months. You will get a reading very close to zero. these are weirdly your feelings about it, but correlations are not feelings they’re just math It’s really weird that we are arguing about a math equation. There is a right answer here and it’s not the one that you think.
 
I will go further. Correlation means the propensity of one asset to move with another in whatever frequency you were looking at. So, for example, if you look at the rolling correlation using daily candles, that would be the propensity for two assets to move the same direction of roughly the same magnitude each day. if you do it on a weekly candles, it’s each week etc. Correlation does not mean things top out at the same time. Correlation does not mean things bottom at the same time. We were just talking about different things. I am talking about correlation from an actual quantitative perspective. You were just talking about your correlation feelings.
 
GlobalMacro90 said:
do you know a correlation is? Do you know how it’s calculated? I beg you just do the math or just look at a plot of the rolling correlation of bitcoin to any stock market over any rolling time frame of the last 18 months. You will get a reading very close to zero. these are weirdly your feelings about it, but correlations are not feelings they’re just math It’s really weird that we are arguing about a math equation. There is a right answer here and it’s not the one that you think.
More...
Based on daily returns, the correlation between BTC and SPY over the past 18 months (from 5/25/2022 to 11/24/2023) is 0.40. As a point of comparison, the correlation between SPY and QQQ over the same time frame is 0.95.
 
It seems to me that BTC is correlated to profitless tech stocks when the times are good for the equity markets to rise, but it also seems to act similar to Gold during hard money moments like the invasion in Ukraine or Millei winning.

I think that Gold is ultimately related to hard money that is why it does follow rates in a cyclical way. Gold will skyrocket as soon as the Fed decides it is time to lower rates especially if it is because the economy is slowing down but inflation hasn't gotten below 3%.

The boom in the 1970s in Gold was related to the Fed not taking inflation seriously until Volker and that's when Gold topped.
 
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