Over this week I got thinking about the correlation of Bitcoin and the U.S stocks, and the purported claims of Bitcoin being digital gold and therefore a safe-haven. I could only conclude that all these claims contradict the true nature of Bitcoin. Maybe it will be safe to think that those who assume Bitcoin to be safe-haven are only been extreme in their support for the digital asset or attempting to shill their bag. Whichever be the case, Bitcoin is Bitcoin for what it is, a noble digital asset.
On the flip side, the commodities market has a negative correlation with stock. I am beginning to think that a cryptocurrency that tracks the price performance of the top 10 commodities by market cap will best serve as a price hedge against stocks. Just like the S&P 500 is a standalone trading asset that tracks the top 500 U.S stocks, why can't we have such in crypto to track the performance of the top 10 traditional commodities? I am trying so much not to divert the focus from Bitcoin, but look at it, this will give a lot of colors to the crypto trading market.
We will have an asset that doesn't necessarily plunge whenever Bitcoin price tanks, compared to what we are seeing in altcoins that bleed the hell out of them whenever Bitcoin makes a little downward movement.
Many people who are into Bitcoin don't care if it's a safe haven or not. Long-term investors are interested in high returns, not high stability. Traders care about regular fluctuations, so whether it's safe to hold money in Bitcoin is of no concern to them.
More importantly, I agree with BrewMaster and don't think Bitcoin is mirroring the stock price movement. If we look at S&P price chart, the price was steadily albeit slowly increasing from November 2019 till February 2020. Bitcoin, on the other hand, experienced a solid drop in December and was recovering throughout January. While there are some similarities in spring 2020 and December 2018, there's definitely no mirroring.