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.
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.”
