Bitcoin (BTC) has started to decouple from the U.S. stock market index S&P 500 according to crypto statistician Willy Woo.
First signs of de-coupling behaviour spotted between BTC and stocks.
Buying from an influx of new users provides price support preventing speculators from trading the correlation downwards.
NVTP approximates a valuation for BTC with organic investor velocity on the blockchain. pic.twitter.com/AvilB9cfdD
— Willy Woo (@woonomic) October 29, 2020
Predicting this behavior in late September, he asserted that Bitcoin will break ties with traditional markets due to an influx of new users:
“Bitcoin will decouple from traditional markets soon, but driven by its internal adoption s-curve (think startup style growth) rather than changes in perceptions as a hedging instrument by traditional investors.”
Referring to Network Value to Transaction Ratio (NVT), an indicator Woo introduced in 2017, the analyst said that Bitcoin’s NVT price has shown clear price support despite the S&P falling sharply over recent days.
The NVT can be likened to Bitcoin’s P/E (price to earnings) ratio, however since Bitcoin has no earnings in the literal sense, Woo replaced the P/E values with network value (Bitcoin’s market cap) and daily USD on-chain transaction volume.
Two days ago, Bitcoin’s NVT price (price support) crept into new all-time-highs above $11,000.
Woo added that the indicators suggest Bitcoin could begin reclaiming its status as a “safe-haven” asset should stocks continue to fall:
“What this test shows is that if stocks crash, Bitcoin powered by its large adoption s-curve, swallowing ever more capital, will present perfectly good safe haven properties.”
On Oct 26, Morgan Creek Digital co-founder Anthony Pompliano claimed “Bitcoin is the ultimate safe haven” and the market is proving it,” adding that Bitcoin “could not be more uncorrelated” with the stock market.
Not everyone agrees that…