Posted June 10, 2022
By Matt Insley
Predicting Crypto Trends
The rollercoaster ride crypto investors have recently been on feels oddly familiar for those also investing in the stock market. In fact, the correlation between these two markets is higher than ever before.
According to Dow Jones Market Data the similarity between the crypto market and the S&P 500 tripled in the first quarter of 2022 versus 2019 to 2021.
One analyst even said that if you want to know where the crypto market is going, don't look at bitcoin or ether—look at Apple instead!
Why is there such a strong correlation between these two markets? Well, it all comes down to investor psychology: if investors are feeling bullish about stocks, they're likely to be bullish about crypto and vice versa.
Just like investing in stocks, buying cryptocurrencies allows you to profit from the success of an individual company or industry.
For example, if you buy shares in Apple (AAPL) stock, your money will grow if Apple becomes more successful over time. The same goes for cryptocurrencies: if your coin grows in value over time because people want it more than others do (or because its underlying technology has been improved), then you'll make money off of it too!
Both of these things are about human behavior—and the way we behave as humans is pretty much the same no matter where we live.