Introduction

So, picture this: Bitcoin, the rebellious teenager of the financial world, suddenly decides to wear a suit and tie and hang out with the grown-up equities. Yep, you heard it right. According to Kaiko Research, Bitcoin’s (BTC) correlation with equities is increasing, hitting a 90-day correlation of 0.17 last week. This is quite the U-turn from its multi-year low of a mere 0.01 in March. Meanwhile, down in Brazil, Bitcoin's cool factor is soaring, with a staggering four-month trading volume of $6 billion. That's a whole lot of digital cash flying around!

Bitcoin's Correlation with Equities

Okay, let's get into the nitty-gritty. Kaiko's May 13 research report describes Bitcoin's evolving relationship with equities. From its multi-year low correlation of 0.01 back in March, Bitcoin’s 90-day correlation with equities rose like a helium balloon to 0.17 in the first week of May. Fun fact: during bullish markets, this correlation can hit as high as 0.6. That's almost like Bitcoin and equities being the best of buddies at a stock market party, right?

However, don't start comparing your Bitcoin investments to your stock portfolio just yet. Since early 2024, Bitcoin's correlation with the European STOXX 600 equity index has pretty much been non-existent. At the start of this year, BTC had a -0.14 correlation with China's CSI 300 equities index, and it still sits below zero. It seems Bitcoin's hanging with the stocks but isn’t too eager to form lifelong friendships with them just yet.

So, what’s driving this fickle friendship? According to the research, April's sell-off of risk assets was sparked by "macroeconomic headwinds and geopolitical tensions." Basically, global finance had one too many espressos and freaked out a bit, pushing Bitcoin to find some comfort in the familiar arms of equities. A classic tale of financial drama, right?

Adoption in Brazil

On the sunnier side of the equator, the Brazilian crypto market is pumping up the volume—literally. Trading volume with Brazilian real (BRL) reached an impressive $6 billion between January and early May 2024. This São Paulo heatwave has made Brazil the biggest crypto market in Latin America and the seventh-largest fiat currency market globally. Talk about a carnival!

Here’s where things get even spicier: BRL trading volumes have grown 30% from the previous year and have outpaced US dollar (USD) trading volumes since January. It seems Brazilians are truly embracing the crypto scene, with stablecoins making up nearly half of all BRL trading. Meanwhile, BTC and ETH together account for 43% of BRL trade volume. That's some serious market muscle!

But it’s not just about volume. This surge in activity also highlights how Brazil's crypto market has matured. Unlike the wild west days of early crypto trading, the market now features a broader range of assets and trading strategies, including stablecoins, which offer a cushy safety net amidst the volatility.

Other Data

Kaiko's report doesn't stop there. Prices for ETH puts and calls have started to dance to different tunes since March. This divergence could hint at impending volatility, especially as the US SEC ponders over whether to approve or reject spot Ethereum ETFs come May 23. Keep your popcorn handy; it’s going to be a thrilling watch!

Interestingly, approvals for foreign crypto ETFs haven't had the powerful impact that many had hoped for. Take Hong Kong’s OSL exchange, for example. Following the region's approval of spot Bitcoin and Ethereum ETFs on April 15, their volumes reached only $1.7 million by the end of April. Contrast that with the near $8 billion volumes OSL saw in January after the US gave the green light to spot Bitcoin ETFs. Clearly, not all ETF approvals are created equal.

Meanwhile, Bitcoin fees saw a spike following its halving but settled down after the initial hype around the Bitcoin Runes Protocol died down. Lower fees may lead to selling pressure among crypto mining companies, potentially casting a shadow over market dynamics. It’s a roller-coaster of fees, approvals, and trading volumes, but isn’t that just part of Bitcoin's charm?

Trading volume in Brazil

Alright, crypto enthusiasts, get this – Brazil's crypto trading volume is positively booming! Between January and early May 2024, the Brazilian market flaunted a hefty $6 billion in trading volume. That's a massive 30% hike from last year, making Brazil the undisputed giant in the Latin American crypto market and the seventh-largest fiat currency market worldwide. Move over, dollar, there's a new contender in town!

Delving deeper into the action, it turns out stablecoins are dominating the show. Almost half of the total BRL trading volume is claimed by these stable superheroes. Not to be left in the dust, Bitcoin (BTC) and Ethereum (ETH) are holding their ground too, collectively making up 43% of the BRL trading volume. And folks, it looks like the Brazilian crypto scene isn't just hot – it's scorching!

The big question on everyone's mind is: How did Brazil manage this crypto coup? The recipe includes a mix of macroeconomic shifts, favorable regulations, and an increasingly tech-savvy population eager to dive into the crypto pool. With the Brazilian real flexing its muscles and outpacing the dollar, it's clear that Brazil is no longer just that country famous for football and carnival – it's a crypto powerhouse!

This spike in trading activity isn't just good news for crypto traders. It's a significant pointer toward broader adoption and legitimization of cryptocurrencies. With Brazil leading the charge in Latin America, could this be the beginning of a crypto renaissance across the region?

Other data

Now, let's shift gears a bit and look at some intriguing tidbits from the crypto sphere. Kaiko Research has thrown some light on the divergence in prices for ETH puts and calls since March. This trend might just be the storm clouds signaling impending volatility – especially with the upcoming US SEC decision on spot Ethereum ETFs on May 23. What suspense!

Speaking of ETFs, let's talk about some foreign counterparts. While the approval of Bitcoin and Ethereum ETFs should logically send markets into a frenzy, it’s been more like a gentle wave rather than a tidal surge. Hong Kong’s OSL exchange, after receiving the green light for ETFs, saw volumes worth $1.7 million in late April. Compare this to the $8 billion volume in January following the US's stamp of approval for spot Bitcoin ETFs, and it’s clear that not all ETF news is created equal.

Back on the home front, Bitcoin had its own saga. Fees had their sky-high moment following Bitcoin’s halving but took a nosedive after the initial hype around the Bitcoin Runes Protocol fizzled out. Lower fees sound great but don’t pop the champagne just yet. Reduced fees could spell trouble for mining companies, potentially leading to selling pressure and a ripple effect in the market.

So, what's the takeaway from this smorgasbord of crypto data? Markets are as unpredictable as ever, with enough drama to keep even the most hardened investors on their toes. Whether it’s ETF approvals, changing fee structures, or skyrocketing trading volumes in Brazil, it's a wild ride we’re all strapping in for!

Bitcoin sees correlation with equities as Brazil's 4-month trading volume hits $6 billion

Bitcoin’s relationship with the equities market is starting to get a bit more intimate. According to Kaiko Research, the 90-day correlation between Bitcoin (BTC) and equities rose to 0.17 in early May. Compare that to the multi-year low of 0.01 in March, and it's like they're exchanging glances across a crowded room. While this budding relationship is still far from the 0.6 high seen during bull markets, it's significant enough to stir interest among market watchers.

Currently, Bitcoin seems to have a bit of a wandering eye. Since the start of 2024, it's maintained an almost non-existent correlation with the European equities index, STOXX 600. As for China’s CSI 300 equities index, BTC kicked off the year with a -0.14 correlation, and it’s yet to cross the zero line. Kaiko attributes these quirky behaviours in part to April’s macroeconomic headwinds and geopolitical tensions—because what’s a love story without a little drama?

Adoption in Brazil

Meanwhile, south of the equator, Brazil is having its own crypto party. The Brazilian crypto market saw a staggering trading volume of $6 billion between January and early May 2024. That’s right, six billion. This rocket-fueled growth makes Brazil not only the largest Latin American crypto market but also the seventh-largest fiat currency market globally. So, if you're thinking of brushing up on your Portuguese, now might be a good time.

Brazilian real (BRL) trading volumes have risen 30% from the previous year and are leaving US dollar (USD) trading volumes in the dust since January. Here's a fun fact: almost half of all BRL trading is in stablecoins. The dynamic duo of BTC and ETH accounted for 43% of BRL trade volume, proving yet again that these two are the life of the party.

Other data

But wait, there's more. Kaiko Research threw a few other data points into its report to keep us all on our toes. For example, prices for ETH puts and calls have been on a divergent path since March. Kaiko hints that this could signal impending volatility, especially as we inch closer to the US SEC's decision on spot Ethereum ETFs come May 23.

Foreign crypto ETF approvals haven't exactly set markets ablaze. Just look at Hong Kong’s OSL exchange: it saw volumes of only $1.7 million at the end of April, despite the region approving spot Bitcoin and Ethereum ETFs just a couple of weeks earlier. Contrast that with the $8 billion traded in January when the US green-lit spot Bitcoin ETFs, and it's clear that investor excitement is a bit of a mixed bag globally.

And let's not forget about Bitcoin fees. They spiked post-Bitcoin halving, only to fall following early interest in the Bitcoin Runes Protocol. Kaiko warns that these lower fees could lead to selling pressure among crypto mining companies, potentially casting a shadow over the market.