Crypto Market Is Dependent On Stock Market. The Correlation Between Nasdaq 100 And BTC

Summer's End: An Anxious Outlook for the Global Economy

Michael Burry is a well-known US investor who became famous for betting on the collapse of the US real estate market and the burst of the bubble in 2008.

On 15 August, he filed a 13F form with the Securities and Exchange Commission (SEC), revealing the positions of his fund, Scion Asset Management. To the surprise of many, the investment portfolio turned out to be almost completely empty.

Burry held shares worth 165 million at the end of the first quarter. These included companies such as Google, Meta and Stellantis. However, the latest report filed with the regulator revealed that all of it had been sold and the glorified investor's only long position is in GeoGroup, a company involved in running private prisons, but the value of the position is negligible at just under $3.31 million.

The investor has recently been posting a number of tweets suggesting the end of the bear market rally. This has sent shock waves across the market, as the investment manager has usually been successful in predicting the market moves, famous for his incisiveness.

If there were to be large declines in the broad traditional market, e.g. equities, what could this mean for crypto? The correlation between BTC and the Nasdaq 100 seems to be apparent, but after the last all-time high reading of 0.84 in May, it dropped to around 0.48 at the end of June. What is unfortunate, however, is that the correlation has been rising with subsequent waves of declines and peaked near local lows.

If the stock market were to actually experience a crash, a strong reaction from the crypto market can be expected. The recent increase in correlation may be due to the increasing participation of token trading institutions. Michael Burry's attitude was addressed by Mati Greenspan CEO of Quantum Economic, stating that predicting the timing and scale of a crash is almost impossible.

"Predicting a stock crash is a lot like predicting an earthquake. You know one will happen every so often but you can never tell exactly when or how severe it will be" - Greenspan said.

On the Conotoxia MT5 platform, BTC is seeing its fourth day of decline, losing more than 0.7% at 10:30 GMT+3, while ETH is gaining less than 0.3%, drawing its first upward candle in three days.

Rafał Tworkowski, Junior Market Analyst, Conotoxia Ltd. (Conotoxia investment service)

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Source: Michael Burry closed almost all his positions - what could another stock market crash mean for crypto?

Summer's End: An Anxious Outlook for the Global Economy

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