Bitcoin is having a bit of an identity crisis, once again.
For nearly all of the past three years it’s strictly been a risk-on/risk-off asset. Its tight correlation with the Nasdaq was useful to identify intraday turning points in sentiment but it seemed to destroy arguments that it was an uncorrelated asset.
At least it did until this month. Bitcoin surged in March as the security of the global banking system came into question. The 40% jump showed it could be an uncorrelated asset and a hedge once again, at least in a period of moderate financial stress.
Intuitively, the reasons it rallied his month make sense. Money was flowing out of banks in search of a home. Much of it moved to larger, safer banks and other funds moved into the safety of bonds or gold but bitcoin captured…
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