2018-8-18 00:01 |
A Correlation Between Overstock’s Stock And The Bitcoin Price
There is a very strange “coincidence” happening at the market right now. If you watch closely the Bitcoin price and the Overstock.com (OSTK) stocks at the moment, you can notice that both of them seem to be following the same pattern.
It may look surprising that a public stock would be tracking the Bitcoin price, but that is actually what it looks like it is happening right now. Since 2014 the stocks of the two companies have been following a similar pattern. That’s four years and counting.
While it may look like this comparison does have any sense at all, you should remember that Overstock was, in fact, the first major retailer to actually accept bitcoin as a form of payment on its site.
The operations of the company have expanded since them, but it looks like the investors from the United States might be using Overstock’s stocks as some kind of proxy asset for Bitcoin as they do not have an ETF at the moment.
The History Between Overstock And BitcoinSince 2014 began, both Overstock and Bitcoin had seen tremendous gains. Both stocks were on fire that year. However, as soon as Overstock started to accept Bitcoin in September 2014, the stocks of the company went down together with Bitcoin and a crash started. Both companies fell more than 20 percent after that and an uncanny correlation between the two companies started.
While Bitcoin started to break its downtrend in June 2015, Overstock continued its descent but the bear market of the two companies did show some similarities.
As the Bitcoin surge started and the token entered the bull market last year, rising about 1,500 percent, Overstock’s stocks also started to go higher and they were able to rise 400% in that year.
The Correlation Gets Pretty Uncanny In 2018If you do not believe the argument so far, 2016 will definitely prove it to you. After both stocks ended their 2017 bull runs in a very similar way and their bubbles started to burst together, we started to see similarities between them that are even bigger than the ones we had seen before.
Look at the list of correlations: both stocks had their prices dropping to their bottom point on February 6 after the bear market started. Also, both of them peaked after a relief rally on February 20. Both rallies were temporary and did not last longer. Finally, both companies had their lowest prices on June 28. That is simply too much coincidence.
While it would be too early to say that this is a coincidence, it is clear the investors are seeing Overstock as some kind of proxy for Bitcoin and also more of a crypto company than an online retailer.
This way, many investors tried to invest in “bitcoin” by using Overstock, it seems, or at least that is what the numbers show.
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