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Over the last few sessions, the market has been in a lull in the US session   for cryptos. It has forced me to ask if investors are more interested in stocks at the moment as they keep hitting new highs.  

The two charts below show the difference in percentage terms since Bitcoin hit its recent peak on 26th June. Bitcoin has fallen around 50% while the S&P has risen nearly 8%. I am not saying they are directly correlated assets but if you accumulated some wealth in cryptocurrencies would you move it over to the stock markets over time?  

Some analysts and commentators have suggested this is the case while I am sceptical. As an investor, it is good to diversify once you have made some profit but cryptocurrency investors may just pull funds from cryptos rather than invest elsewhere. It is interesting how much the stock markets have moved since the price of Bitcoin has dropped. Gold has also moved higher within the same period but only 3.85% which also doesn’t suggest much of a correlation between the outflow in BTC/USD.

Over the next few sessions, if the US indices grind higher I for one will be keeping an eye on cryptocurrency volatility to see if the trend continues.



S&P 500 analysis