Is There a Correlation Between The Dow Jones & Cryptocurrency?

Posted by hgsba on June 13, 2018

Following having a rather nice bull run The Dow Jones Industrial Average has had a rough few of weeks. Cryptocurrency is also experiencing a a static correction. Could there be a correlation between two investment worlds? Crypto News Today

We have to be careful using vague conditions like “bull and bear markets” when crossing over into each investment space. The main reason for this is that cryptocurrency over the course of their amazing 2017 “bull run” saw gains of well over 10x. Should you put $1, 000 into Bitcoin at the beginning of 2017 you should have made well over $10, 1000 by the end of the year. Traditional stock investing has never experienced anything like that. In 2017 the Dow increased approximately 23%. 

I’m really careful when reviewing data and charts because My spouse and i realize that you can make the numbers say what you want them to say. Just like crypto saw enormous gains in 2017, 2018 has seen an equally quick modification. The point I’m aiming to make is that we need to make an effort to be impartial in our comparisons.

A large number of that are fresh to the cryptocurrency camp are amazed at the recent drive. All they’ve heard was how all these early on adopters were getting abundant and buying Lambos. To more skillful traders, this market correction was pretty evident due to the shooting upwards prices over the previous two months. Many digital currencies recently made many folks overnight millionaires. It had been evident that sooner or later they can want to take some of that profit off the stand.

Another factor I think we really need to consider is the recent addition of Bitcoin options contracts trading. I personally assume that there are major makes at the office here led by the guard that want to see crypto are unsuccessful. I also see futures and options trading and the pleasure around crypto ETFs as positive steps toward making crypto mainstream and considered a “real” investment.

Having said all that, I actually commenced to think, “What if somehow there IS USUALLY a connection here? inches

What if bad information on Wall Street influenced crypto exchanges like Coinbase and Binance? Could it cause both of them to fall on the same day? Or what if the opposite were true and it triggered crypto to increase as people were looking for another destination to park their money?

In the heart of not trying to skew the numbers also to remain as objective as possible, I desired to hang on until we did find a relatively neutral taking part in field. This week is about as good as any as it presents an interval in time when both markets saw modifications.

For those unfamiliar with cryptocurrency trading, unlike the stock market, the exchanges never close. I’ve traded stocks and options for over 20 years and know very well that feeling where you aren’t sitting around on the sluggish Sunday afternoon thinking,

“I really wish I can control a position or two right now because My spouse and i know when the marketplaces open the price changes significantly. ”

That Walmart-like availability can also give loans to knee-jerk psychological reactions that can snowball in either direction. With the traditional stock exchange people have a chance to hit the pause button and sleep on their decisions overnight.

To find the comparative of an one week cycle, I took the past seven days of crypto trading data and the past 5 for the DJIA.

Here is an alongside comparison over the earlier week (3-3-18 to 3-10-18). The Dow (due to 20 of the 35 companies that it involves losing money) decreased 1330 points which represented a 5. 21% decline.

Leave a Reply

Your email address will not be published. Required fields are marked *