Crypto vs. Capital Markets in the Time of Crisis

How is Bitcoin and Ethereum behaving relative to equities and commodities.

Capital markets and crypto have been under constant pressure given the geopolitical crisis between Russian and Ukraine. Last night, Russia launched a full invasion into the Ukrainian territory causing ripple effects across global markets. In general, we should think about the impact of this war as a repricing across several asset classes including crypto. Commodities markets have been particularly active given Russia’s influence in sectors such as natural gas and aluminum.

Despite a lot of speculation about crypto’s reaction to this geopolitical crisis, the data shows some non-trivial relationships. Looking at some IntoTheBlock’s indicators for crypto and capital markets, reveals some shocking correlations with different asset classes. Let’s take a look:

2) Energy stocks have been outperforming Bitcoin and Ethereum. This is not surprising considering Russia’s influence in the energy market.

3) Energy stocks have also been more volatile than Bitcoin and Ethereum which is somewhat surprising.

4) Bitcoin correlation with gold is almost non-existent. This is very telling about how investors are going to perceive store of value assets in a time of crisis.

5) Natural Gas is showing negative correlation with Bitcoin and Ethereum. This is one of the commodities that is likely to appreciate given Russia’s influence in the market.

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