Capital Economics, which is based in London, said that since the end of last year, the price of cryptocurrencies began to decline since record highs, that is closely related to the trend of the S&P 500.
However, this correlation is more than a coincidence and is related to special factors. As far as Bitcoin is concerned, the recent price fall is caused by a number of factors, including concerns about stricter regulations, prohibition of cryptocurrency advertisements on large internet platforms, and prohibitions from certain banks. The customer bought Bitcoin with a credit card.
The stock market has also suffered in recent days because of concerns about the outbreak of trade war between the United States and China, and economic growth may slow down.
The capital economic company wrote in the report: “In other words, the factors that affect the price of Bitcoin are still different from those that affect the prices of other assets.”
Thus, the research company said that the stock market may fall further this year, and bitcoin will be worse.
“The correlation between Bitcoin and stock prices has recently increased, but we think this is only a temporary phenomenon. We still think that bitcoin lacks fundamental value and will perform worse than other assets in the coming months,” says Capital Economics. .
The company further pointed out: “We expect the stock market will fall because investors are worried that the US interest rate hike will slow economic growth. But the main factor driving down the bitcoin price may be that investors finally understand that in the long run, Bitcoin is not Alternative currency for traditional currency. ”