Bitcoin’s on again, off again, relationship in terms of a correlation with the stock market seems to be ongoing as the major cryptocurrency has once again decoupled from the stocks. Bitcoin’s price has risen by over four percent while both the S&P 500 and the Dow have both fallen more than four percent each.

Bitcoin, somewhat surprisingly, seemed to be heavily correlated to the traditional markets when the first major effects of the Covid-19 outbreak struck. The markets collapsed dramatically in early March and took with them the cryptocurrency market. It was assumed that the traditional market interest in Bitcoin had been pulling out to mitigate risks, causing the price to fall.

However, since then, the price of Bitcoin has bounced back and shown some more of its traditional volatility and anti-correlation against centralized markets in making it to a price point above $6,000.

Waiting for the bottom

Bitcoin’s movement since the crash has shown times of correlation with the stock market — but usually in times of gains, whereas when the markets have fallen, and the Federal Reserve has introduced more money printing, Bitcoin has acted as a slight hedge.

The traditional markets look to still be under heavy pressure with the bottom of this financial crisis far from over as the US predicts a heavy death toll from the crisis. Earlier this week the White House stated that it concurs with the estimate that up to 240,000 Americans could die from Covid-19 within the next 3 weeks.

The bottom of the traditional markets will only be reached once the crisis is over, whereas, for Bitcoin, the bottom has been called by some prominent figures.

Bitcoin to boost the economy

While Bitcoin has been suggested as a hedge against this financial crisis, it has still failed to shine in this regard. Bitcoin has shown signs of being anti-correlated, but it is not enough to be reliable. The coin has also shown that in the eyes of the mainstream, it is still rather seen as a risky bet than a reliable hedge.

However, there is one suggestion as to how Bitcoin may come to the aid of the population, in that it may be an asset that ‘Hodlers’ will be forced to sell to get their hands on fiat money. Bitcoin hodlers are not the kind to easily part with their coins, but with the economic situation as it is, and people being more desperate for money, Bitcoin may have to be sacrificed.