Despite global inflation and the bearish trend that has gripped the crypto market, Bitcoin (BTC) and its correlation with established classes are increasingly gaining the attention of investors and analysts. A well-known cryptanalyst and former institutional investor with 25 years of experience in the financial markets, known as PlanB, posted a chart on his Twitter account on July 14 showing a linear correlation between traditional asset classes and Bitcoin.
The chart compares the 10-year rise of the S&P 500 (on the x-axis) and Bitcoin (on the y-axis). According to the data, the average prices of the S&P 500 quadrupled from around $1,000 to $4,000, while Bitcoin rose 1,000 times during the observed period, from $10 to $10,000. PlanB called it “spectacular.”
S&P500-BTC almost back in line pic.twitter.com/tghGylc4q5— PlanB (@100trillionUSD) July 14, 2022
Yup, I forget sometimes that not everybody is here from 2019 or before. This is just ~10 years of S7P500 on x-axis versus BTC on y-axis. S&P from $1K to $4K (4x) and BTC from $10 to $10K (1000x). Just a visual, nothing more nothing less. IMO it's spectacular.— PlanB (@100trillionUSD) July 14, 2022
In a July 11 tweet, PlanB had explained that inflation was the reason why Bitcoin came into being in the first place, as Finbold pointed out. He wrote that “inflation is always and everywhere a monetary phenomenon” caused by central banks degrading currencies by printing more money.
Meanwhile, Mark Mobius, the founder of asset management firm Mobius Capital Partners stressed there was a strong correlation between the activities of Bitcoin and the S&P 500, describing it as “a tail wagging the dog. You see, Bitcoin goes down, and the S&P 500 goes down. So it's a very unusual situation.”
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.