Investor Alert

New York Markets Close in:

Crypto Archives | Email alerts

June 4, 2021, 1:05 p.m. EDT

Is bitcoin an uncorrelated asset? These stocks and funds boast correlations higher—and lower—than Coinbase

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Bitcoin USD (BTCUSD)
  • X
    S&P 500 Index (SPX)
  • X
    NASDAQ 100 Index (NASDAQ Calculation) (NDX)

or Cancel Already have a watchlist? Log In

By Mark DeCambre

Crypto prices have mostly risen in 2021—despite a bout of volatility in recent weeks. And that price run-up has stoked intense interest among investors eager to gain some exposure to cryptographic assets like bitcoin /zigman2/quotes/31322028/realtime BTCUSD +11.48% .

Absent an exchange-traded fund that allows for direct exposure to bitcoin and crypto—one doesn’t currently exist in the U.S.—there are a number of assets that offer high correlations with the world’s No. 1 virtual currency.

In simple terms, correlation refers to the extent to which assets perform in relation to one another. 

Based on commonly used statistical measures, a correlation of 0 means the performance of one asset is uncorrelated to the other, while a correlation of 1 indicates that the asset moves in lockstep—in the same direction, and by the same degree. A negative correlation means that assets tend to move in the opposite direction.

For its part, bitcoin has been viewed as an asset that isn’t correlated with many others. The crypto asset certainly has a low correlation with stocks, as represented by the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.07% and a pretty low correlation with technology stocks, as represented by the large-capitalization oriented Nasdaq-100 index /zigman2/quotes/210598364/realtime NDX -0.03% .

Bitcoins correlation with the Nasdaq-100, as measured in late May, was around 0.20 on a rolling 20-day average, and its correlation with the S&P 500 is 0.29, as of June 2, according to Dow Jones MarketWatch data.

The asset with the highest correlation to bitcoin, presently, is the Grayscale Bitcoin Trust /zigman2/quotes/203330852/composite GBTC +16.88% , at 0.81, meaning that the trust moves nearly in lockstep with the crypto.

That is even as competition and expected bitcoin-pegged ETFs have sapped GBTC of a premium that it used to enjoy relative to its net asset value.

CoinDesk reports that the GBTC premium was around 30% at the beginning of 2021, but is now trading at discount at around -11.40% to NAV, as of the middle of the week.

GBTC has been closed to new investors and is also hoping to convert its trust into a bitcoin ETF, if it can secure regulatory approval—a challenge as no crypto-pegged fund has been greenlighted in the U.S.—yet.

Outside of GBTC, Michael Saylor’s MicroStrategy /zigman2/quotes/202561856/composite MSTR +21.83% has a correlation of 0.73, and VanEck Vectors Digital Transformation ETF /zigman2/quotes/226048301/composite DAPP +11.16% has a 0.65 correlation to bitcoin.

Crypto platform Coinbase Global’s /zigman2/quotes/225893452/composite COIN +9.03% correlation to bitcoin, meanwhile, is comparatively low at 0.32. lower than Tesla Inc. /zigman2/quotes/203558040/composite TSLA +2.21% at 0.55, as well as bitcoin mining companies Riot Blockchain /zigman2/quotes/209538617/composite RIOT +18.08% at 0.60 and Marathon Digital Holdings /zigman2/quotes/205886758/composite MARA +16.15% at 0.57.

Coinbase, the U.S.’s largest crypto platform, went public in mid April and is down nearly 30% since then. Bitcoin is down 42% over the same period.

As the chart illustrates the U.S. dollar /zigman2/quotes/210598269/delayed DXY -0.33% has a negative correlation with bitcoin, at -0.37.

—Ken Jimenez contributed to this article

/zigman2/quotes/31322028/realtime
US : CoinDesk
38,439.38
+3,958 +11.48%
Volume: 0.00
July 26, 2021 10:23a
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,408.62
-3.17 -0.07%
Volume: 401.95M
July 26, 2021 10:23a
loading...
/zigman2/quotes/210598364/realtime
US : U.S.: Nasdaq
15,107.52
-4.27 -0.03%
Volume: 139,816
July 26, 2021 10:23a
loading...
/zigman2/quotes/203330852/composite
US : U.S.: OTC
$ 31.78
+4.59 +16.88%
Volume: 3.78M
July 26, 2021 10:08a
P/E Ratio
0.65
Dividend Yield
N/A
Market Cap
$18.83 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/202561856/composite
US : U.S.: Nasdaq
$ 657.55
+117.84 +21.83%
Volume: 598,960
July 26, 2021 10:23a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$5.26 billion
Rev. per Employee
$240,729
loading...
/zigman2/quotes/226048301/composite
US : U.S.: Nasdaq
$ 24.50
+2.46 +11.16%
Volume: 18,468
July 26, 2021 10:23a
loading...
/zigman2/quotes/225893452/composite
US : U.S.: Nasdaq
$ 245.23
+20.31 +9.03%
Volume: 2.48M
July 26, 2021 10:23a
P/E Ratio
84.62
Dividend Yield
N/A
Market Cap
$47.30 billion
Rev. per Employee
$1.02M
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 657.58
+14.20 +2.21%
Volume: 5.24M
July 26, 2021 10:23a
P/E Ratio
656.67
Dividend Yield
N/A
Market Cap
$619.79 billion
Rev. per Employee
$445,694
loading...
/zigman2/quotes/209538617/composite
US : U.S.: Nasdaq
$ 33.18
+5.08 +18.08%
Volume: 6.65M
July 26, 2021 10:23a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.70 billion
Rev. per Employee
$1.51M
loading...
/zigman2/quotes/205886758/composite
US : U.S.: Nasdaq
$ 28.62
+3.98 +16.15%
Volume: 5.50M
July 26, 2021 10:23a
P/E Ratio
49.67
Dividend Yield
N/A
Market Cap
$2.45 billion
Rev. per Employee
$1.45M
loading...
/zigman2/quotes/210598269/delayed
US : U.S.: ICE Futures U.S.
92.61
-0.30 -0.33%
Volume: 0.00
July 26, 2021 10:13a
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.