Comparison of stock indices with the price of bitcoin

    Predicting market movement is an extremely thankless task, and the forecasts of the so-called "experts" are close in their accuracy to 50%, that is, like tossing a coin. Nevertheless, the desire to profitably invest funds forces many of us to follow such forecasts so as not to miss the major market movement, as was the case with the increase in the price of bitcoin from $ 0.1 to $ 1000.

    Recently, the Bitcoin exchange rate has dropped significantly, so that involuntarily there are thoughts about reaching the bottom, followed by a powerful upward trend. This was expressed by Dan Morehead, executive director and founder of investment company Pantera Capital Management, on the pages of Forbes business magazine.

    The specialist reinforces his version with the help of technical analysis, comparing the graphs of stock indices in historical perspective with the change in the BTC rate.

    Dan Morehead recalls the events of March 9, 2009, when the S&P 500 index fell below 700 points for the first time in 13 years. Panic reigned in the market, and Goldman Sachs analysts published a research report assessing the likelihood of a market fall to 400.

    However, things went differently further, and stock indices almost continuously increased.

    The graph shows the S&P 500 index for 2006-2015 in black, the NASDAQ for 1996-2015 in gray, and the Bitcoin exchange rate for 2013-2015 in yellow. All graphs are time-shifted and scaled so that local minima fall at one point (red line).



    Morehead points out that the rise and fall of stock prices and the value of Bitcoin occurred in a similar scenario.

    It is likely that further the BTC rate will repeat the story with stock indices, that is, it will grow. In particular, the NASDAQ is now 4.5 times higher than the low of 2002, and the S&P 500 is 3.1 times higher than the low of 2009.

    At the same time, Bitcoin fell by about 76% from the maximum (November 2013). Investment company Pantera has developed a model for assessing the “fair” value of BitIndex bitcoin , which indicates the growth of cryptocurrency, based on the overall development of the Bitcoin ecosystem.



    At least this is true with a 50% probability.

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