{"id":100957,"date":"2020-10-30T06:34:08","date_gmt":"2020-10-30T03:34:08","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/willy-woo-signs-that-btc-is-decoupling-supports-its-safe-haven-status\/"},"modified":"2020-10-30T06:34:08","modified_gmt":"2020-10-30T03:34:08","slug":"willy-woo-signs-that-btc-is-decoupling-supports-its-safe-haven-status","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/willy-woo-signs-that-btc-is-decoupling-supports-its-safe-haven-status\/","title":{"rendered":"# Willy Woo: Signs that BTC is decoupling supports its ‘safe haven’ status"},"content":{"rendered":"

“# Willy Woo: Signs that BTC is decoupling supports its ‘safe haven’ status <\/strong>”<\/p>\n

Bitcoin (BTC) has started to decouple from the U.S. stock market index S&P 500 according to crypto statistician Willy Woo.\u00a0<\/p>\n
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First signs of de-coupling behaviour spotted between BTC and stocks.<\/p>\n

Buying from an influx of new users provides price support preventing speculators from trading the correlation downwards.<\/p>\n

NVTP app<\/a>roximates a valuation for BTC with organic investor velocity on the blockchain. pic.twitter.com\/AvilB9cfdD<\/a><\/p>\n

\u2014 Willy Woo (@woonomic) October 29, 2020<\/a><\/p><\/blockquote>\n

Predicting this behavior in late September, he asserted<\/a> that Bitcoin will break ties with traditional markets due to an influx of new users:<\/p>\n

\u201cBitcoin 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.\u201d<\/p><\/blockquote>\n

Referring to Network Value to Transaction Ratio (NVT), an indicator Woo introduced<\/a> in 2017, the analyst said that Bitcoin\u2019s NVT price has shown clear price support despite the S&P falling sharply over recent days. <\/p>\n

The NVT can be likened to Bitcoin\u2019s 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\u2019s market cap) and daily USD on-chain transaction volume.<\/p>\n

Two days ago, Bitcoin\u2019s NVT price (price support) crept into new all-time-highs above $11,000.<\/p>\n

Bitcoin\u2019s NVT Price hits ATH. Source: <\/em>Willy Woo<\/em><\/a><\/figcaption><\/figure>\n

Woo added<\/a> that the indicators suggest Bitcoin could begin reclaiming its status as a \u201csafe-haven\u201d asset should stocks continue to fall:<\/p>\n

\u201cWhat 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.\u201d<\/p><\/blockquote>\n

On Oct 26, Morgan Creek Digital co-founder Anthony Pompliano claimed \u201cBitcoin is the ultimate safe haven\u201d and the market is proving it,\u201d adding that Bitcoin \u201ccould not be more uncorrelated\u201d with the stock market.<\/p>\n

Not everyone agrees that Bitcoin had any decoupling to do: analyst Scott Melker Tweeted<\/a> in May that stocks and Bitcoin are \u201cnot correlated now, and they weren\u2019t correlated before.\u201d<\/p>\n

Early last week, crypto investor Chris Dunn suggested<\/a> a negative correlation between stocks and BTC had started, prompting Woo to reiterate<\/a> his stance of Bitcoin as a safe alternative to traditional assets:<\/p>\n

\u201cMakes sense that BTC will continue to be correlated in short time frame trading; but not in the longer time frames. BTC is a safe haven, just that \u2018risk-on\u2019 (meaning it’s very new) is skewing this fact.\u201d<\/p><\/blockquote>\n

However, some analysts have suggested that an excessive preoccupation with the correlation between BTC and the S&P 500 could be dangerous. Analyst Micha\u00ebl van de Poppe said that when things get messy, as they did in March this year, \u201call correlations tend to go towards 1,\u201d adding:<\/p>\n

\u201cSince then, gold, silver & Bitcoin have been resilient for any downwards move and showing strength apart from the equity markets. Don\u2019t pin yourself on those correlations.\u201d<\/p><\/blockquote>\n<\/div>\n