Bitcoin recouples its correlation with the U.S stocks

Ever since the pandemic lockdown started in March 2020, the premier digital asset is moving in tandem with the S&P 500

Heightened Volatility has been the hallmark of financial markets ever since the pandemic lockdown started in March 2020. Although extremely elevated levels of volatility produced some wild moves in the global equities, it is much of common sight in the digital assets, led by Bitcoin.

Although volatility has dropped off significantly since the March crash as stocks staged one of the quickest rebounds ever, the latest jolt came on Thursday when Standard & Poor’s 500 (S&P 500) Index of large U.S. stocks lost 5.7%. More surprising was the fact that Bitcoin followed the benchmark U.S index by registering a 6.37% price drop.

Apparently this isn’t a one-off bearish event happening in both the equity and digital asset markets. Data shows that Bitcoin has assumed a higher correlation with the U.S stocks ever since the pandemic lockdown ensued — earlier in March. The emergence of this interesting phenomenon over the past three months also means Bitcoin had become inversely correlated with the CBOE Volatility Index (VIX). The charts below make comparisons to demonstrate how this correlation has appeared.