Bitcoin’s fluctuating correlation with US equities is raising questions about its role as a global safe-haven asset during periods of financial stress.
Bitcoin (BTC) exhibited a strong negative correlation with the US stock market when analyzing the short-term, seven-day trailing correlation, according to new research from blockchain data provider RedStone Oracles, shared exclusively with Cointelegraph.
Bitcoin, S&P 500, 7-day rolling correlation. Source: Redstone Oracles
However, RedStone said that the 30-day indicator signals a “variable correlation” between Bitcoin price and the S&P 500 index, with the correlation coefficient ranging from -0.2 to 0.4.
This fluctuating correlation suggests that Bitcoin “doesn’t consistently function as a true hedge for equities” due to its lack of a strong negative correlation below -0.3, which is needed for “reliable counter movement during market stress,” the report said.
Bitcoin, S&P 500, 30-day rolling correlation, 1-year chart. Source: Redstone Oracles
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