DBS says Bitcoin No Longer a Fringe Asset, It is Now Fueling Volatility in US Stocks


The volatility in Bitcoin is now fueling the volatility in US stock futures, according to a study by Singapore’s DBS Group Holdings Ltd.

DBS’s Chief Economist Taimur Baig and Macro Strategist Chang Wei Liang wrote that S&P 500 contracts tend to register bigger swings after the leading cryptocurrency spiked up or down by 10% in the span of an hour.

Four trading days were analyzed in its study Dec. 28, Jan. 4, Jan. 29, and May 19 in relation to the S&P 500 futures.

The study showed that the S&P 500 are more positively correlated following a large crypto move, registering as 0.26 versus 0.19 in normal conditions. It’s, however, still a weak link.

DBS further found that the variance of returns on S&P 500 futures was also 42% greater than normal on those hyper volatile days.

“This suggests that broader equity sentiment could become more coupled with sentiment in Bitcoin markets for a temporary period of time.”

“Given the recent Bitcoin stresses, market participants may be wise to keep an eye on developments in this space.”

DBS’s analysis came out after in a recent note by JPMorgan strategists where they wrote that the cross-asset impact of the cryptocurrencies' massive downside move has been rather “mild” with less equity and credit drawdown.

Meanwhile, the DBS team concluded the $740 billion cryptocurrency is not a fringe asset anymore.

“Bitcoin is no longer the fringe asset that it once was, given the higher correlations and increased U.S. equity volatility that trail extreme moves in Bitcoin markets.”

Get Daily Headlines

Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

What to Know More?

Join Our Telegram Group to Receive Live Updates on The Latest Blockchain & Crypto News From Your Favorite Projects

Join Our Telegram

Stay Up to Date!

Join us on Twitter to Get The Latest Trading Signals, Blockchain News, and Daily Communication with Crypto Users!

Join Our Twitter

Add comment

E-mail is already registered on the site. Please use the Login form or enter another.

You entered an incorrect username or password

Sorry, you must be logged in to post a comment.
Bitcoin Exchange Guide