Bitcoin Ends Q1 Closely Following S&P 500

As the S&P 500 closed out the first quarter down 5.5%, bitcoin BTC$78,978.35 closely followed, with the world’s largest digital asset tied to the S&P 500 as closely as ever.

• Bitcoin closed the quarter down 2%, tightening the correlation with the S&P to nearly 0.9 (1 is perfect correlation, -1 is perfectly inverted).
• While bitcoin touched $48,000 earlier in the week, it has since dropped below $45,000.
• The correlation between the index and bitcoin appears to be cyclical; bitcoin’s losses will outpace the stock market’s given the 24/7 nature of the asset.
• Likewise, its fast rebound will also outpace the S&P.
• Traders are concerned about the prolonged nature of the Russia-Ukraine war, and threats from the Kremlin to cut off Europe’s supply of natural gas unless the contracts are denominated in rubles.
• As CoinDesk previously reported, although bitcoin had one of its worst-ever starts to a year, it ended up gaining around 9% throughout March occasionally outperforming U.S. stocks.
• However, many layer-1 tokens like Solana, Terra, AVAX and Cardano were able to outperform bitcoin with double-digit gains on mainstream curiosity about the launch of Ethereum 2.0 according to analysts who spoke with CoinDesk.