Cryptocurrencies and Stocks Correlation

Dear Reader,

Cryptocurrencies and stocks have recently exhibited 80% correlation or relation between price moves. I think if stocks fall by let's say 20% measured by the main global stock market indices, cryptocurrencies will fall by more than 40 % due to their more leveraged nature.

Since cryptocurrencies, differently to stocks, do not participate in the capital structure of the company and are not entitled to bankruptcy leftover proceeds, cryptocurrencies' prices are much more volatile that the average stocks' prices. What is more, cryptocurrencies are much less liquid than the US stock market and thus much more volatile.

However, as long as the prices going up party for stocks is going on, cryptocurrencies will continue rising and outperforming stocks. I will not be surprised if Bitcoin's price surpasses 30 000 USD in 2021.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich