Daily Management Review

Bitcoin's correlation with S&P 500 falls to three-year low


Binance Research: Bitcoin's correlation with the S&P 500 index has reached a three-year low.

According to the cryptocurrency market report for the first half of 2023 from Binance Research, the correlation of Bitcoin's value with the traditional finance market (S&P 500 index) has fallen to its lowest level in more than three years, and was only 7% as of the end of the first half of 2023.

The claim that Bitcoin can be used as a tool for diversification is supported by the fact that Bitcoin's correlation with the S&P 500 is currently at its lowest level in more than 3 years. The figure has decreased from roughly 45% in January to only 7% by the end of June. The average in 2022 was 56%, the research adds.

According to Binance Research, because the fluctuations of Bitcoin's value were mostly autonomous from conventional financial markets, it was formerly frequently thought of as a tool for portfolio diversification. The connection between Bitcoin and the S&P 500, however, reached its historical high of 75% in May of last year, as a result of central banks all over the world raising interest rates, after which the situation changed.

source: binance.com