In recent years, a battle has arisen over whether or not Bitcoin's price is linked to other financial assets, such as stocks. A recent report from Fidelity Digital Assets illustrates this controversy.
The Coin Telegraph explained that Fidelity's lengthy report, titled Bitcoin Investment Thesis, shows Bitcoin's role as an alternative investment, not only that there is no correlation between Bitcoin's price and the prevailing financial assets, but It shows higher returns for Bitcoin investors over a long-term time horizon.
where the report said: The average correlation of Bitcoin to other assets from January 2015 to September 2020 is 0.11, indicating that there is almost no relationship between Bitcoin's revenues and other assets. .
The report also indicated that the correlation of 0.11 is found on a scale between (-1) and (1), noting that a degree (1) means a flawless correlation, (-1) results in the opposite price movement.
and if Bitcoin had a score of (-1), for example, the asset's price would rise as stocks fell. A score of (0) means that the movements of other assets do not affect Bitcoin's price.
In recent years, Bitcoin seems to have followed a price path in line with the major markets at times, as Bitcoin was dumped alongside stocks in March 2020 during The initial news of the emergence of the new Corona virus (Covid 19). However, the digital asset recovered faster, with higher relative gains.
Recently, Bitcoin digital currency (BTC) suffered a slight drop in line with stocks due to news of delayed stimulus financing.
But despite these short-term effects, Fidelity reported that Bitcoin has distinct fundamentals that are not affected by the health and economic situation resulting from (Covid 19).
Fidelity noted that the unconnected nature of Bitcoin may be partly due to a new era of individual investing interest, driven by social media attention.
The report also discussed the fact that Bitcoin has a number of stories of interest to different investment circles, arguing that despite the debate about whether Bitcoin is a store of value or A medium of exchange, one of the nice things about Bitcoin is that its success is not dependent on serving a single purpose.
