According to Stack Fund co-founder and CEO Matthew Dibb, the stock market is suffering at the time of writing, and so long as it continues to suffer, bitcoin will suffer as well.
Matthew Dibb: BTC Will Suffer So Long as Stocks Do
At this point, there is no reason to deny that bitcoin and the stock market share a special correlation of sorts. Whenever the stock market goes up, bitcoin tends to follow and vice versa. This also works in reverse. If stocks move down, bitcoin will typically edge back a step or two. This has been going on for some time.
According to Dibb, the stock market has been falling as of late, and should this behavior continue, bitcoin has no chance of regaining its previous momentum. The currency has been stuck in a rut for the past few days. The currency initially rose all the way to $12,400 about a month ago, but this spike didn’t last long at all. The currency was immediately knocked back into the high $11,000 range, but sadly, this also proved to be too much for the currency to handle, and the slumps didn’t stop until bitcoin had lost about $2,000 off its price, leaving it at a measly $10,400.
At press time, bitcoin is trading for around $10,700, which is roughly $300 higher than where it’s been in a while, but this is still nothing to get super excited about. We all know bitcoin can do better than this. We’ve seen it, but it does correlate with stocks, which recently fell as much as 800 points. Thus, bitcoin is going to continue to get hurt if stocks don’t get their act together.
The good news is that bitcoin is remaining in five-figure territory for the time being. It has stayed over $10K, but according to Dibb, things could change for the worse granted the other markets do not improve themselves. In a series of tweets, Dibb explained:
Bitcoin may revisit September lows (around $8,970). Bitcoin could be in for some big bumps over the next six weeks.
Gold Needs to Improve as Well
Dibb added something further that’s likely to throw several investors off. While bitcoin does share a relationship with stocks, he says that even if the market improves itself somewhat, bitcoin will likely go nowhere unless gold does. This serves as evidence that perhaps the correlation between gold and bitcoin is stronger than the one the digital asset shares with gold.
If that’s true, then that means that bitcoin is indeed a “safe haven” like so many analysts and investors have claimed over the years. We’ve seen evidence of this in recent weeks as more people are viewing bitcoin and neighboring forms of crypto as hedges against economic strife and inflation. Many now look at bitcoin as a tool for stabilizing one’s wealth during hard times.