Bitcoin & Ethereum Rise in Tandem: 2021’s Biggest Crypto Opportunity

• According to the year-end report from Arcane Research, the global markets have all fallen strongly correlated this year.
• The “30-day correlations,” an indicator that measures how in-tune Bitcoin has been with another asset in terms of price movement over a 30-day period, has been very high in recent weeks with Ethereum.
• Bitcoin positively correlated with the US equities during 2022, with its correlation being around or above 0.5 for most of the year.

As the global markets come to the end of a turbulent year, the year-end report from Arcane Research has revealed that the correlation between the various markets has been stronger than ever. This correlation can be measured with the “30-day correlations” indicator, which measures how in-tune Bitcoin has been with another asset in terms of price movement over a 30-day period. When the value of this metric is greater than zero, it means there has been a positive correlation between BTC and the other asset in the past month. On the other hand, negative values imply that the price of the crypto has been reacting to changes in the value of the other asset by moving in the opposite direction.

This year, Bitcoin has been positively correlated with the US equities, the S&P 500, and the Nasdaq. This is evident from the 30-day correlations chart, which shows a metric value of around or above 0.5 for most of the year. Additionally, the data also reveals that Ethereum has also had a year of high correlation with Bitcoin, with the metric hitting all-time high values in recent weeks.

This positive correlation between Ethereum and Bitcoin is an indication that the two digital assets are becoming increasingly intertwined and their prices are more closely linked than ever. This could be the result of the recent surge in Ethereum’s market capitalization, which has seen it overtake Bitcoin’s in terms of market capitalization. Some analysts have also argued that this could be due to the increasing demand for Ethereum’s smart contracts and decentralized applications.

The positive correlation between Bitcoin and Ethereum suggests that the two digital assets could continue to rise in tandem in the coming year, with Ethereum potentially outperforming Bitcoin. This could be a major boon for investors, as the two digital assets could provide a diversified portfolio and be a hedge against market volatility. With the cryptocurrency market expected to continue to grow in the coming months, it could be the perfect time to invest in both Bitcoin and Ethereum.