Crypto analyst Mati Greenspan says the correlation between crypto assets and the S&P 500 has fallen significantly since the dramatic sell-offs in tandem early in the pandemic.

In the Aug. 5 Quantum Economics newsletter, Greenspan stated that Bitcoin (BTC) and crypto are “once again able to claim independence from the traditional markets.” However the analyst also added that even during the early stages of COVID-19 — roughly March to May — the markets were never more than “loosely correlated.”

The following chart represents Bitcoin’s correlation with the S&P 500 on a range of 1 (perfect correlation) to -1 (inverse correlation).

90-day Pearson correlation between Bitcoin and S&P 500

90-day Pearson correlation between Bitcoin and S&P 500. Source: Mati Greenspan

“We can clearly see earlier this year, where the correlation spiked up to 0.6 due to the multi-asset early-pandemic sell-off,” Greenspan said. “By now, however, we're once again below 0.2, which basically means that there is no correlation on a day-to-day basis anymore.” 

Common market drivers

Despite these market trends seemingly diverging, Greenspan said there was at least one common factor driving both stock and digital assets: the Federal Reserve.

“During periods when the Fed prints money, it sends prices upward in all markets,” he said.

Looking bullish

Greenspan stated in an Aug. 2 interview that he believed “the bull market is back.”  On July 22, Gemini crypto exchange co-founder Tyler Winklevoss stated in a tweet that the Fed was continuing “to set the stage for Bitcoin's next bull run" with further stimulus spending.

As of this writing, the price of Bitcoin is approaching $11,800, having risen 4.89% in the last 24 hours. 

This surge comes amid expectations that the U.S. government will announce a second stimulus package on Aug. 7. Democratic leaders are pushing for a $3.4 trillion package, while Republicans are advocating for one worth $1 trillion.