The correlation between Bitcoin (CRYPTO: BTC) and WallStreetBets-favorite stocks has reached a level that has not been seen since 2020.
What Happened: According to a chart created by The Daily Shot, there has been a significant uptick in Bitcoin’s 30-day correlation to an index of so-called meme stocks including GameStop Corp (NYSE: NYSE:GME) and AMC Entertainment Holdings, Inc (NYSE: AMC), which rose to prominence after WallStreetBets Reddit forum conducted a short squeeze.
Bitcoin is increasingly correlated with meme stocks. pic.twitter.com/VFq2GHsJTmAMC shares are up 27% over the week, while GME shares have risen 24% over the same period. Bitcoin saw a 10.4% increase over the last week as cryptocurrency market sentiment improved and resumed trading above $47,000.— (((The Daily Shot))) (@SoberLook) March 24, 2022
“Bitcoin has definitely been a leading indicator for investor risk sentiment,” said CoinDesk Markets analyst Damanick Dantes.
“When things started to stabilize earlier this month, Bitcoin had that slight pick up ahead of the equity market.”
Dantes acknowledged that while meme stocks like AMC and GME had seen a breakout a little earlier than Bitcoin, the assets went on to trade “almost hand in hand” with each other.
“That’s the speculative nature of the asset. It tends to move just like the higher-risk stocks, and you’re definitely seeing that here.”
Earlier this month, Benzinga reported that Bitcoin’s 90-day correlation with the S&P 500 had reached a 17-month high.
Arcane Research noted that this correlation had only been higher for five days in Bitcoin’s entire history and called the current regime “unprecedented.”
Price Action: According to data from Benzinga Pro, Bitcoin was trading at $47,300, up 1% in the last 24 hours.
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