Bitcoin’s status as an uncorrelated asset is about to be revoked, as a scarily close relationship to the price of avocados implies that the digital currency may be about to fall off a cliff.
Bitcoin’s performance of late has left a little to be desired, and strangely so has the price of avocados. This relationship was pointed out in a profoundly insightful tweet by Bloomberg’s financial Journalist, Tracy Alloway. A graph depicting the price of Hass avocados and bitcoin shows an eerily similar pattern.
Avocados witnessed a notable boom in the last quarter of 2019, with a sizable 130% increase on the previous year.
“These high prices have to do with seasonal production in Mexico,” said David Magaña, senior analyst at Rabobank, speaking to USA Today back in July, “It’s normally the lowest at this time of the year.”
Bitcoin went through a similar boom back in April, rising approximately 225% to a yearly high of around $13,000; many pointed to existing retail investors as the primary catalyst behind the rally.
As with everything these days, this correlation is likely the fault of 18-35-year-olds. Their obsession with both avocados and bitcoin seems to have run dry at the exact same time. No doubt Bakkt is involved in some way as well.
Back during the aforementioned parabolic run in April, ETF investment advisor Nate Geraci estimated that 90% of millennials preferred bitcoin as an asset over gold. Backing up this sentiment, a survey by Harris poll conducted on behalf of Blockchain Capital found that nearly half of 18-to-34-year-olds are “very” or “somewhat” likely to buy BTC in the next ten years.
It isn’t just avocados; this year, bitcoin has been connected to the S&P 500 and gold. Its association with the latter came as bitcoin started to display some budding use as a safe haven. Following the escalation of the China-U.S. trade war in August – a result of a tit-for-tat tariff increase – bitcoin ostensibly started to show a clear relationship with the yellow metal.
In any case, if this latest avocado correlation is anything to go by, bitcoin could hit guac-bottom. No doubt,many will take this opportunity to buy the dip.
Last modified: October 11, 2019 2:33 PM UTC