Bitcoin Cryptocurrency And The S&P 500 Continue in Different Directions

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19 June, 2018

Bitcoin Cryptocurrency And The S&P 500 Continue in Different Directions

There are ebbs and flows with any type of financial investment. Rapid increases in value are often times followed by an equally rapid decline.

Even tried and true investments in Blue Chip stocks a Grade-A bonds go through a corrective phase after a bull run may have driven up their value. Earlier this year, there were some definitive parallels between the declining value of the cryptocurrency Bitcoin and the stock market’s S&P 500. However, in current trading, each entity is heading in opposite directions. In a recent post on ArmyOfBitcoin.com, he makes note of Bitcoin’s ongoing correction from its all-time highs of last December as it directly correlates with the current rebound in value of the stocks that comprise the S&P 500.

As of late last week, Bitcoin (BTC) was still trading well below the $7,000 level with prices dipping to $6,600. This is a far cry from the end of 2017 when the values topped out near the $20,000 level. The concern among many investors is BTC’s continuing decline will have an impact on investments outside the realm of the crypto industry. That does not seem to be the case with the direction the S&P 500 has taken in recent trading. Matt Maley is an equity strategist for Miller Tabak and he was quoted in this report as stating earlier last week in a discussion with CNBC’s Trading Nation, “There are things to be concerned about in terms of the stock market here with emerging markets and other issues, but I don’t think bitcoin is going to be one of them.”

Maley went on to mention that he is not worried that BTC’s continued slide would have a ripple effect on traditional investments because many of the people with these type investments did not jump on the crypto investment bandwagon when prices of bitcoin were soaring. When compared to the money that was lost when the dot.com bubble of the 1990’s finally burst he added, “Everyone was talking about both of those things when they were in their bubbles, but only in the tech stocks did they own it all. Everybody seemed to own some tech stocks; whether it be individual names or through their mutual funds. Today, while that bubble was forming in bitcoin, not very many people bought it at all.”

The Army Of Bitcoin report does go on to mention that prior to the month of May, the decline in value of BTC and the S&P were actually mirroring one another. The parting of the ways is a recent phenomenon that has each one heading in opposite direction well into the month of June. Boris Schlossberg is the managing director of FX strategy at BK Asset Management. He was also quoted in a statement to CNBC stating, “Bitcoin attracted a huge amount of speculative capital early and that capital is getting bled out. You’re going to see even a further divergence between the price of bitcoin and the price of stocks moving forward.”