The Bitcoin-Stock Market Decoupling Isn’t Happening Yet, but It Totally Will

Don’t miss CoinDesk’s Consensus 2022, the must-attend crypto & blockchain festival experience of the year in Austin, TX this June 9-12.

For U.S.-based readers, I hope you are lucky enough to have a long holiday weekend to enjoy. If you do, remember you are given this day off because military personnel gave their lives.

I’m personally taking this long weekend to see one of my closest friends get married. So this week’s newsletter will be short, sweet and a bit off-the-wall (and mostly statistically insignificant). When I asked one of my other closest friends how I would convince y’all to read something like this he gave me some great advice.

So, please. Let me write about the Decoupling. Indulge me.

– George Kaloudis

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The Decoupling. The latest iteration of “hopium” for bitcoiners and crypto natives. When it finally inevitably happens, it’ll be up only for Big Crypto and down only for Big Fiat.

But what it actually means is a bit funny. The Decoupling is the moment when bitcoin’s price diverges from equities and starts going up when equities go down (and vice versa). The Decoupling is the moment when bitcoin (BTC) and equities become negatively correlated to each other. Bitcoin will go to $1 million a coin and equities will spiral to zero.

It’s a bit funny because bitcoin was uncorrelated to almost all macro assets (gold, S&P 500, bonds, U.S. dollar) not too long ago. We wrote about this in our 2021 research report (page 9). Here is the chart we shared in that report with the accompanying text.

90-day Trailing Correlation to Bitcoin in 2021 (CoinDesk Research, St. Louis Fed, Yahoo Finance)

In general, macro assets remained within an uncorrelated band (-0.2 to 0.2) in 2021. This is contrasted to 2H 2020, where gold and equities were somewhat positively correlated to BTC, and the U.S. dollar (USD) was somewhat negatively correlated to BTC. Bitcoin is a unique macro asset like no…


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