Correlation: Cryptos And Equities Walking In Lockstep
Tim Knight | Jan 12, 2022 11:39PM ET
Some folks have mentioned that crypto seems to lead the way when it comes to equities.
Looking at Bitcoin (BTC) and the SPDR® S&P 500 (NYSE:SPY), it seemed to me that, nah, the correlation really isn’t that strong.
Just out of curiosity, I tried BTC with iShares Russell 2000 ETF (NYSE:IWM) and—zowie! They are practically joined at the hip! So that’s quite interesting and worth noting.
I’m definitely a believer these days in all assets moving pretty much in lockstep, and it’s no surprise that crypto’s recovery in recent days correlates tightly to the rise in equities. If BTC and Ethereum (ETH) start to re-weaken, I think we’re going to see precisely the same thing happen with stocks, and most particularly with small caps.
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