Ecoinometrics - Macro is in the driver’s seat for Bitcoin, but that could change soon

Bitcoin's correlations report June 2023

Bitcoin is in between a regime change and a narrative change. Let’s see how it looks like from the perspective of correlations.

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Bitcoin’s correlations report

Every month in the Bitcoin’s correlation report we examine a set of correlations and trend similarity metrics to understand what is driving Bitcoin’s price action and what you need to pay attention to. This is our report for June 2023.

The takeaway

If you don’t have time to read the whole report here is what you should know:

• Bitcoin is no longer driven by the same factor as the stock market and that’s causing a divergence in the price trends.

• As part of the “Bitcoin stocks” anything that’s not a miner or a BTC holding company is also getting decoupled.

• The real driver of Bitcoin’s price action over the last 90 days has been macro. The pattern of correlations to gold, rates and US$ strength is a testimony to that fact.

• But a new narrative is emerging, “2023 as the year of the Bitcoin ETF”. If that narrative takes hold BTC might temporarily ignore macro. Something to follow up until we get clearer data.

The table below summarize the state of the correlations over the past three months.

But before we dig into the details of each category of assets let me explain what is the different between correlation and trend similarity and why it is important to consider both.