Quote from: Sayeds56 on Today at 07:06:42 AM

Quote from: JayJuanGee on March 18, 2023, 02:18:10 PM

For years there have been people who have been basing their investment choices into bitcoin based on what they believe that the fed will do and/or other macro factors, and they have been touting out nonsense regarding how bitcoin prices are correlated to equities, fed rates and various other macro factors like that, and sure there may well be some short term correlation, but a lot of people have gotten fucked because they fail/refuse to appreciate the reality that bitcoin is way less correlated than what the various pundits are proscribing it to be.

It is accurate to say that there may be short-term correlation between Bitcoin and other macro factors, such as equities or interest rates, but the strength of this correlation can vary widely and may not be consistent over the long term. In fact, Bitcoin correlation with traditional assets like stocks and bonds is relatively low, which makes it a potentially valuable diversification tool for investors.

Part of the problem that I have been finding for several years, is that there are a lot of folks who seem to want to tout these ideas of correlation, which yeah they are likely quite true in the short-term, but the misleading aspect is that it ONLY takes a short-period of non-correlation for those who had been relying on the correlation assertion to get fucked by their own reliance - so I personally believe it is way better to start from a premise that they are not correlated.. rather than starting from a premise that they are.. and in that regard, I hardly give a ratt's ass if BTC prices and equities (stock markets) are correlated 95% of the time, and then 5% of the time, BTC ends up doing a 10x jump in comparison to stocks/equities, and then thereafter BTC ends up going back to being correlated for the next 3-4 years until it is not correlated again for another 10x jump.. . You can look back at the BTC charts and you can see those kinds of patterns of mostly correlation except for those short-periods in which the BTC price jumps up 10x, 100x or whatever, and then comes back down.

. so the fact of the matter would be that anyone who had been largely relying on correlation gets fucked during each of those periods of non-correlation because they might 1) fail to invest enough into bitcoin, or 2) they might sell too much too early.. part of the reason that bitcoin is really early in its adoption levels, and you get all kinds of folks thinking that they are smart when they sell on the way up but then the BTC price does another 5x to 10x after they sold.

Failing to buy sometimes gets folks not being sufficiently aggressive in their investment into BTC, getting scared to buy when it dips or even waiting for further dips. Yeah, even newbies and whimpy investors may well end up profiting quite stupendously from being invested into BTC if they do not make major mistakes, and surely I consider the non-investment and under investment into bitcoin to be more dangerous than the over-investment, even though in this last cycle, we did get to witness plenty of examples of the mistakes on the other end in terms of over-investing into bitcoin in such a way that either leveraging was taking place or there was a certain expectation that BTC prices would not drop below certain price points (and the 200-week moving average was one of those price points that a lot of over-leveraged folks had used as their expectation of absolute BTC price bottom.. and we even witnessed examples of normies and newbies becoming vulnerable because they ended up relying on the good will of other folks over their bitcoin and they were either wanting to get yield from their bitcoin or they had not necessarily realized that they third parties were playing like degenerate gamblers with such yield products (but using their coins to engage in such gambling that was expecting the BTC price to NOT go below certain price points, such as the 200-week moving average.

For sure, it is not completely clear how to protect oneself from those kinds of contagions in the space, and even if we might suggest that those are examples in which BTC's correlation/non-correlation to the stock market is muddied, ultimately, I still am going to assert that it is likely quite misleading to expect that BTC prices are correlated to equities and stocks.. even if there are a lot of otherwise smart people making those kinds of claims. Good luck with those kinds of seemingly (and likely) inferior reliances.. since another thing those kinds of inferior reliances also tend to demonstrate (at least for me) that there is some level of failing/refusing to understanding the actual power (of non-correlation) that comes from a new innovative/disruptive/face-melting/paradigm-changing (peaceful wealth transferring) asset class, such as bitcoin.. even if there are a lot of times that "my lil precious" doesn't appear to be anything "special".. and those who buy into bitcoin seem to be delusional and pie-in-the-sky wishful thinkers.. which sure some of them are..... but should not take away from the foundational strengths that actually exist within what bitcoin actually is.