The market may have started off the year on a strong bullish momentum but this trend was quickly reversed and the volatility, which was more or less non-existent for large parts of 2019, came back with a vengeance.

The aggressive round of liquidations, which saw Bitcoin give up its year-to-date gains and trade just under $4k (having traded $10k in late February), coincided with equity markets undergoing a similar degree of correction as the spread of the coronavirus gradually took hold around the world. The risk off trade even resulted in Bitcoin trading in lockstep with other risk assets, namely equities.

However, it was not the first time that Bitcoin established some degree of correlation to other assets and every time, this correlation was promptly unwound.

About the Author:

Denis Vinokourov has close to 10 years of experience in traditional markets and a front office facing role/macro desk. He transitioned into digital assets market in late 2017 and currently serve as the head of research at BEQUANT, a cryptocurrency exchange & institutional prime brokerage.

The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions GmbH or its affiliates.