Senior GlassNode researchers are challenging the idea that Bitcoin prices are correlated with US money supply or other major economies.
There is no structural link between Bitcoin and the money supply of major economies
In a new post on X, GlassNode senior researcher Cryptovizart.₿ spoke about the correlation between Bitcoin and the money supplies of the seven (G7) economy groups. “correlation” here refers to an indicator that measures how closely the prices of two given assets are combined.
A positive value for this metric means that the price of one asset is moving in the same direction, thus responding to the movement of another asset. The closer the indicator is to 1, the stronger the relationship.
On the other hand, the indicators below the zero mark suggest that there is a negative correlation between prices. In other words, they are moving in the opposite direction. This behavior is the strongest at -1.
Well, here’s the chart shared by analysts, providing some representation of the correlation between Bitcoin and each G7 Nation’s money supply over a 90-day rolling window.
As you can see in the graph, the correlation between Bitcoin and the seven supplies of the world’s largest economy has been shaking wildly over the years. In many cases, positive metric periods do not have a clear macroeconomic trigger behind the shift.
“The correlation between Bitcoin and the supply of US M2 or other major economies does not show a consistent or predictive pattern,” GlassNode researchers said. The long-term view through a rolling window for 180 days shows the same.
“Despite frequent claims of stable linkage, the data suggest that relationships are largely probabilistic rather than structure,” says Cryptovizart. Bitcoin certainly isn’t independent of the global economy, but this pattern suggests that there is a mix of several other factors that also play a role in coin driving.
In a previous X post, analysts shared a trend in a 180-day correlation between Bitcoin and two traditional assets, Gold and the S&P 500.
From the top chart, you can see that Gold and Bitcoin have been looking at the 180-day correlation stand at neutral level recently. Meanwhile, the second graph shows a prominent positive value for the metric between the S&P 500 and BTC, meaning that the cryptocurrency is running in parallel with the stocks to some extent.
BTC price
Bitcoin went above $122,000 over the weekend, but it appears the assets were recovered and kicked off on Monday as prices returned to $119,000.
