Market Watch: Stock vs Crypto Performance, Tesla, Apple, Bitcoin and Ethereum Compared
What it the correlation between crypto and the stock market? We analyze Nasdaq, Dow, Apple, Tesla, Microsoft, Bitcoin, Ethereum. Unlimited QE is the most important factor.
In this article, we compare the performance of the stock market and crypto market to date since the announcement of unlimited quantitative easing (QE) by the Federal Reserve. We research and compare the performance of some leading stocks and cryptocurrencies: Apple, Tesla, Microsoft, Bitcoin and Ethereum.
The Corrections after the Close of the US stock market on 24 September
A correction is a 10 percent or more drop in stocks from their most recent peak.
- S&P 500 rose 0.3%, down 9.3% from Sept. 2 high of 3580.84.
- The Dow Jones Industrial Average rose 0.2%, down nearly 12% from its Sept. 2 record highs
- Nasdaq Composite rosed 0.37%, around 12% off its Sept. 2 all-time high.
- Tesla stock rose by 1.95% to $387.79 close, it corrected 22.83%. It corrected 30% compared to the low on Sept 24.
- Apple rose 1.03%, down 21.57% from the record high and down 25.28% compared to the low on Sept 21.
- Microsoft (MSFT) rose by 1.3%, down 12.74% from the record high, and down 15.72% compared to the low on Sept 21.
- Bitcoin rose around 3.6% over the last 24 hours, it was down around 15.5% from Sept. 1. Bitcoin reached around $12,470 of 1-year high on Aug 17. Bitcoin reached around $14,000 of 2-year high on June 24, 2019.
- Ethereum rosed around 7% over the last 24 hours, it was down 35% from its two-year high before 24-hours.
During this period, the Ethereum price dropped more significantly than Bitcoin. We will analyze why below.
Lows of this year
- S&P 500 reached 2,191.86 of one-year low on March 23.
- The Dow Jones Industrial Average reached 19,094.27 of one-year low on March 20.
- Nasdaq reached 6,686.36 of one-year low on March 18.
- Tesla stock reached $70.10 of this year low on March 20.
- Apple stock reached $53.15 of this year low on March 23.
- Microsoft stock reached $132.52 of this year low on March 23.
- Bitcoin reached $3,800 of one-year low on March 13.
- Ethereum reached $86 of one-year low on March 13.
It seems Bitcoin and Ethereum are more fragile than the stock market.
Record high and Yearly high
- S&P 500 reached 3,588.11 of record high on Sept 2.
- The Dow Jones Industrial Average reached 29,199.35 of record high on Sept 3.
- Nasdaq reached 12,074.06 of record high on Sept 2.
- Tesla stock reached $502.49 of the record high on Sept 1.
- Apple stock reached $137.98 of the record high on Sept 2.
- Microsoft stock reached $232.86 of the record high on Sept 2.
- Bitcoin reached around $12,470 of 1-year high on Aug 17.
- Ethereum reached around $490 of 2-year high on Sept 1.
On September 2, S&P 500, Dow Jones, Nasdaq, Apple, Microsoft all reached record highs, while on September 1, Tesla and Ethereum reached their own price high, which are stock and crypto market lead separately in the half-year bull market. It seems Ethereum has a correlation with Tesla.
Maximum gain
- S&P 500, 1.64 times.
- The Dow, 1.53 times.
- Nasdaq, 1.806 times.
- Tesla: 7.17 time from $70.10 to $502.49 USD.
- Apple: 2.6 times from 53.15 to 137.98 USD.
- Microsoft: 1.76 times from 132.52 to 232.86 USD.
- Bitcoin, 3.28 times from 3,800 to 12470 USD.
- Ethereum: 5.7 times from $86 to $490 USD.
Tesla was the major giant lead for the stock market which and performed even better than Ethereum.
Insights:
(1) As always, monetary policies have the most important and direct impact on asset prices. On March 23, Federal Reserve announced unlimited QE and sets up several new lending programs, which meant enough money provision into the market without limits. Since then, both the stock market and the crypto market started a bull run. The monetary policies are the most important factor to watch for market performance, or there is no overall bull market for both the stock market and the crypto market in the short term.
(2) The stock market is led by the tech-giants, particularly Tesla, then FANG. although there is Bitcoin dominance rising in May, the crypto market has been mainly led by the Ethereum and DeFi boom. In DeFi, especially Decentralized Exchanges (DEXs) created many requirements and use cases for Ethers. Bitcoin got more and more attention from institutional investors, MicroStrategy is among them which bought twice a total of 38,250 bitcoins for $425 million. When the stock market starting correction overlapped the SushiSwap's Sushi token launching and collapsing simultaneously, the Ethereum price crashed immediately.
Source: TradingView
(3) The crypto market seems more sensitive than the stock market in the response to bad news. Both the Bitcoin and Ethereum plunged earlier than Tesla and Apple.
(4) The Bitcoin and crypto market are highly correlated to the stock market currently. The major reason is that the half-year bull markets of the stock market and crypto market are mainly driven by monetary policies and new money supply expectations.
(5) The US national debt is around $26.8 trillion. There are not much more space for monetary policies. It is necessary to keep a very low or even 0 interest rate to avoid the problem caused by the high volume interest of the national debt and market panic. The current monetary system seems to be collapsing.
(6) The Covid-19 pandemic continues without apparent signs of reversal. The UK even hit highest daily COVID-19 cases at 6,634 today. The upcoming US presidential election is very likely to cause more market chaos.
(7) At this point, it seems very unlikely that the downtrend of the stock market is finished. As for the crypto market, it appears even less optimistic than the stock market.
With additional reporting by Lucas Cacioli
Image source: Shutterstock
