Bitcoin Up, Everything Else Down?
For the last 6mths, Bitcoin was inversely correlated to everything...BTC sold off, but gold and equities hit fresh ATHs. This has recently flipped as the orange coin shows surprising relative strength
G’day Folks,
Markets have a special way of confusing even the brightest of people.
They often do the opposite of what people expect, and then we collectively assign a new narrative to the weirdness to help our simple minds explain why afterwards.
The last six months have been rough for Bitcoin investors, and euphoric for holders of almost every other asset class. Bitcoin prices were cut in half, whilst everything else hit almost daily all-time-highs.
Oil is trading a stones throw off $100, the Strait of Hormuz is still effectively closed, the US dollar is rallying, cracks are appearing in private credit markets, and equities have taken a meaningful -5% to -7% tumble from the highs.
This is the combination you’d expect to see early in a ‘risk-off’ environment, and Bitcoin usually takes yet another gut-punch under these conditions.
And yet here we are, with Bitcoin trading up +5% over the last month, and experiencing a brief patch of inverse correlation relative to gold and equities.
Today’s post will be a study of why this may be the case, and my read on why Bitcoin appears to be the fittest player on the pitch right now.
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