Key Takeaways
- Bitcoin briefly rose above $61,000 Friday, following on the heels of the rally in the stock market Thursday. The cryptocurrency gave up some of those gains as stocks wavered Friday.
- Bitcoin has been more correlated with the S&P 500 than gold amidst this week’s financial turmoil.
- U.S. spot bitcoin ETFs have seen outflows of $77.3 million this week and spot ether ETFs have seen $120.6 million of inflows.
Bitcoin (BTCUSD) briefly rose above $61,000 riding the recent rally in equities but gave up some of those gains to trade on either side of the $60,000 mark depending on where stocks moved.
This comes after the cryptocurrency crashed below $50,000 for the first time since February on Monday amid one of the worst days for stocks in recent history.
Bitcoin’s Correlation With Stocks
Much like Monday’s price drop came in the midst of global market turmoil more generally, the price recovery and eventual reversal has mimicked what has taken place in traditional equities markets.
Notably, bitcoin’s correlated movements with traditional equities markets have shown that the cryptocurrency can still act as a risk-on asset at times, despite the hope that it can operate as a safe haven in times of economic uncertainty.
According to Pearson correlation data from The Block, bitcoin moved more in tandem with the S&P 500 than gold this week, despite the “digital gold” nickname that has been frequently applied to the asset.
That said, many bitcoin holders were not phased by this week’s price action. “In crises, markets sell what they can, not what they want,” Strike CEO Jack Mallers posted on X on Monday. “#Bitcoin is down because it was the only market open to sell on Sunday night, not because the only fixed supply money we have is now less valuable.”
Bitcoin ETFs Return, Still Negative For The Week
The U.S. spot bitcoin exchange-trade fund (ETF) market also saw strong inflows of $194.6 million on Thursday, according to Farside Investors. However, flows are still negative on net this week, with $77.3 million leaving the funds.
Things have looked better for the spot ether ETFs this week, with $120.6 million of inflows, as outflows from the Grayscale Ethereum Trust (ETHE) have slowed down, even as ether prices (ETHUSD) continue to fall. Ether is trading close to $2,500.