Bitcoin is in its own bubble

Bitcoin correlations report, November 2023

What kind of correlation regime is driving Bitcoin right now? The answer is: the ETF expectations regime. 

Nothing else matters at the moment. For Bitcoin, that's both a blessing and a curse.

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Bitcoin is in its own bubble

The takeaway

The expectation of an "imminent" approval of spot Bitcoin ETFs by the SEC is the only thing driving Bitcoin right now. 

Daily returns and long term correlations show that. 

While we are waiting for this correlation regime to fade away Bitcoin will continue ignoring the macro situation. Most assets that are typically indexed on Bitcoin are following on this move.

If the macro situation really deteriorates within this quarter and the next or if the SEC manages to kick the ETF can down the road again, that could be the setup for a pretty big reversal. 

Now let's look at the data.

Daily Bitcoin moves are isolated from macro