Bitcoin is Extremely Correlated to Broader Market

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The bitcoin and cryptocurrency market as a whole has been notoriously correlated with the stock market for quite some time. A new report from Christopher Harvey, the head equity strategist at Wells Fargo, states that this correlation seems to be clearer than ever. Harvey stated that “on Monday, what we saw is all risk products sell off. It sometimes adds duel to the fire.”



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Harvey is stating this in relation to the most recent sell off that occurred in the crypto market, resulting in major tens of percent crashes across the board. This found itself leaking into the stock market as well. He further stated that “last yer what you had was money chasing performance.” As volatility continued to shoot up in the market, there became a large and increasing demand for high amounts of liquidity. On Monday, the Dow Jones industrial average also plunged by almost 1,200 points, leading to the crash happening in the crypto market. These two markets are severely correlated given the high amount of money that is invested in both across the world.



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Harvey stated that “we thin kof it more as what we have to watch out for, what we have to tell our clients to be careful of. We don’t make a call whether it’s going to go up or down but that it’s a risk in the marketplace, and it’s really far our on the risk spectrum.” Wells Fargo raised their price target for equities by about 10% following this most recent crash which some might see as a problem, but others think it is extremely true. Given that the cryptocurrency market is still undoubtedly in its infant stages, there is no doubt that the market will continue to go up and down as more and more people become comfortable with crypto.

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