What Bitcoin and the Stock Market’s Correlation Really Means

The Breakdown

Blockworks

Investing, Business

4.8 • 786 Ratings

🗓️ 1 November 2022

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

This episode is sponsored by Nexo.io, Circle and FTX US. On this week’s “Long Reads Sunday,” NLW reads: “Bitcoin Is Macro, but Not ‘Correlated’ in the Way You Think” – Noelle Acheson “Why Bitcoin Has Been Highly Correlated With Fiat” – Steven Lubka - Nexo Pro allows you to trade on the spot and futures markets with a 50% discount on fees. You always get the best possible prices from all the available liquidity sources and can earn interest or borrow funds as you wait for your next trade. Get started today on pro.nexo.io. - Circle, the sole issuer of the trusted and reliable stablecoin USDC, is our sponsor for today’s show. USDC is a fast, cost-effective solution for global payments at internet speeds. Learn how businesses are taking advantage of these opportunities at Circle’s USDC Hub for Businesses. - FTX US is the safe, regulated way to buy Bitcoin, ETH, SOL and other digital assets. Trade crypto with up to 85% lower fees than top competitors and trade ETH and SOL NFTs with no gas fees and subsidized gas on withdrawals. Sign up at FTX.US today. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our theme music is “Countdown” by Neon Beach. Music behind our sponsors today is “War” by Enoch Yang. Image credit: Violka08/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Transcript

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0:00.0	Welcome back to The Breakdown with me, NLW.
0:09.3	It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world.
0:15.0	The breakdown is sponsored by nexo.io, circle, and FtX, and produced and distributed by CoinDesk.
0:22.9	What's going on, guys? It is Sunday, October 30th, and that means it's time for Long Read Sunday.
0:29.2	Before we get into that, if you are enjoying the breakdown, please go subscribe to it,
0:32.6	give it a rating, give it a review, or if you want to dive deeper into the conversation,
0:36.3	come join us on the Breakers Discord.
0:38.1	You can find a link in the show notes or go to bit.LY slash breakdown pod.
0:42.0	Also a disclosure as always, in addition to them being a sponsor of the show, I also work with FTX.
0:47.1	All right, folks. Well, this past week was trading week on CoinDesk.
0:53.1	And so I thought for LRS it would be fun to do a few of the
0:56.2	pieces that relate to that theme. Where we're going to start is with a piece from Noel
1:00.8	Acheson, who is a former head of research at CoinDesk as well as Galaxy Digital, and who wrote
1:06.9	on October 14th a piece called Bitcoin is macro, but not quote-unquote correlated in the way
1:12.3	you think. Quote, Bitcoin is correlated. I often hear that thrown out in conversations as a dismissive
1:18.9	way of saying that it isn't really an alternative asset at all, and that all this mumbo-jumbo about
1:23.9	it being external to the broader economy is just opium. But very few who say this have
1:28.6	actually dug into the data or thought about the reasoning behind that claim, which is understandable.
1:33.6	Why mess with convenient narratives? I confess that even I used to think that the surge and the
1:38.1	correlation between Bitcoin and the S&P 500 was because the institutional investors marched
1:42.7	into the market in the second half of last year.
1:45.3	Now I'm not so sure. The institutions did indeed march in, and Bitcoin has, to a large extent,
	...

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