At A Glance: S&P 500 and Bitcoin

We examine the S&P 500 and the price of a Bitcoin (BTC-USD) over the last five years (since 2017-12-05). Time-series were normalized to have the same starting value of 100. It’s been a wild ride – the Bitcoin price chart is visually a rollercoaster:

  • Bitcoin is negatively correlated with the S&P 500 (over the past two weeks, the mean of the the 20-day correlation was around -0.6487)
  • On Nov. 9, Binance announced it would no longer buy FTX. That’s the date when the S&P 500 passed BTC-USD.
  • Maximum Drawdown (over the given period): for the S&P 500 it was 33.92%, and for BTC-USD it was a whopping 83.04%!

This is an interactive chart, and controls in the upper right corner will let you go to full-screen mode:

Here’s a second interactive graphic of the same two normalized time-series, this time restricted to the year 2022:

  • Bitcoin plunged below the S&P 500 on April 6th amid a global market decline, the U.S. Federal Reserve’s hawkish comments has been cited as a contributing factor. Around that date, Governor Lael Brainard emphasized the importance of curbing inflation and hinted at the possibility of reducing the central bank’s balance sheet in May.
  • The S&P 500 experienced a maximum drawdown of 25.4% in 2022, while BTC-USD had a max drawdown of 66.7%.

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