After the Commission on securities and exchange Commission (SEC) recently has again postponed the final decision for the bitcoin ETF, traders and investors panicked: after a series of jumps and large hacking bitcoin and cryptocurrencies in General, was in particular need of protection or at least predictability. The market has long existed a demand for more or less reliable tracking tool BTC. Surprisingly, for many years he was under everyone’s nose.
Overstock is one of the oldest online stores that entered the market in 1999, only three years later, Amazon. In addition, it was the first major retailer, the goods and services which you can pay with bitcoin. Looking at the chart of BTC and quotes stock Overstock is not the only link between assets in 2014, their performance showed a striking similarity, which only grew over time. Moreover, the last time the correlation has increased, came at the end of last week, when the market was in decline.
As soon as Overstock grew and, at some point, even got a child blockchain is the company tZero, investors with open markets of the USA, began to in-store promotions as a kind of “mask” for bitcoins. Without access to BTC via an exchange traded Fund, they began to follow the quotes Overstock (OSTK) and showed a trend: positive factors of influence BTC value including the price of OSTK and Vice versa.
Start: bubble 2013
In late 2013, and BTC, and OSTK has demonstrated a significant increase in the value drastically falling in price just before the New year. In both cases, bearish trend was formed in accordance with the same events:
On the first day, like Overstock started to accept bitcoin (9 January 2014), ended in a temporary rise of prices (the so-called “dead cat bounce”) OSTK and BTC. Thereafter, both the asset lost more than 50% of the cost.
In may of that year the assets were in the flat, and then rose slightly in price.
From mid-September to mid-October BTC and OSTK again fell by 20%, then charts their quotes formed a V-shaped parabola, indicating recovery.
Finally, after bitcoin has dramatically fallen in price on 14 January 2015, OSTK also fell 20% in just two weeks later.
Further divergence in the graphs as the shares of Overstock have started to recover later bitcoins, but the structure of their downtrend retained similarities.
Climbing: rally 2017
The picture becomes a little more interesting when bitcoin returns to its former value and continues to add in the price.
As follows from the graph, the rise started in may of 2017 and ultimately lead to growth of 1500% in December. In July quotes for OSTK went on increasing, resulting in the company’s shares have risen by 400%.
Convergence: synchronization schedules
This year the similarity of graphs has become so obvious that to ignore it anymore.
For both assets, the company gain in December over the bursting of bubbles — with the difference of only a month. Further, any significant changes in the market affected quotations BTC and OSTK at the same time (with one exception):
After bubbles burst, the assets in question, reached its first minimum for the year on the same day, February 6, 2018.
Then followed a temporary increase with a peak — like bitcoin, and Overstock stock, 20 February and new lows within a few days.
Later, on June 28, both the asset reached its annual minimum.
What does it mean?
Besides the fact that it may be a coincidence, correlation charts BTC and OSTK testifies to the deep penetration of bitcoins in payment and financial structure Overstock, up to the “natural binding” of the shares. Perhaps a role is the fact that today the company is better known for its initiatives in the field of cryptocurrency, rather than as an online store. Overall, the observed pattern showed that traditional financial institutions, which tries to minimize the risks, you can rely on OSTK as a kind of intermediary the asset instead of investing in cryptocurrencies. However, careless use of the discovered dependence creates the risk of market manipulation.
