Bitcoin's correlation with S&P 500, Nasdaq, and gold prices: Showing a sharp negative correlation after the FTX incident

Since 2020, Bitcoin has mostly shown a positive correlation with the robust US stock market. As the US Federal Reserve's monetary tightening policy intensifies and the US stock market cools down, the price of Bitcoin also shrinks. Even after the LUNA and 3AC incidents, Bitcoin has exhibited a certain level of positive correlation with the US stock market.

However, following the shocking FTX bankruptcy reorganization event that shook the world, the correlation between Bitcoin and the US stock market began to rapidly reverse. As of the deadline, the correlation coefficients between Bitcoin and the S&P 500, Nasdaq, and gold are -0.65, -0.52, and -0.84, respectively.

Bitcoin's Correlation with S&P 500, Nasdaq, and Gold Prices

According to data from The Block, over the past 12 months, the Pearson correlation of Bitcoin with the S&P 500, Nasdaq Composite Index, and gold over a 30-day period has mostly shown a positive correlation, except for gold. However, in early November, following the bankruptcy reorganization of FTX, Bitcoin's price sharply dropped from the $20,000 level to the current $16,000 level, returning to the price level of December 2020. This rapid decline in Bitcoin's price also led to a quick shift to a negative correlation with other assets.

Overall, Cyclical Volatility

Looking at it holistically, the correlation of Bitcoin with U.S. stocks and gold has not shown a long-term sustained positive correlation but rather fluctuates cyclically over time. The lasting impact of the FTX incident on the cryptocurrency market is still to be observed.