BITCOIN and China stock market go hand in hand despite the bans!

I see a lot of interest on my Bitcoin vs U.S. indices fractals and that motivated to make more seemingly 'odd' comparisons that end up to interesting findings.

One such interesting finding is the comparison of Bitcoin (orange trend-line) to the Shanghai Stock Exchange (black trend-line). Everyone in the crypto world knows how strongly the Chinese government has been battling Bitcoin mining and transactions. Last year alone (2021) we had two such events with the May one being the most severe causing a price correction of more than -50%.

Despite the bans, this chart shows the remarkable correlation of BTC with the Chinese stock market! To get a better understanding of how closely correlated they have been since late 2017, I've plotted also the S&P500 index (light grey), on very low opacity though so that it doesn't spoil the main comparison of this study. Especially their correlation throughout 2021 is astounding as both BTC and Shanghai have been trading within a wide range, while the S&P was making High after High.

So the question is obvious. Why despite all of China's hostility and legal actions against BTCUSD, it is so correlated to their stock exchange? I am very curious to read your thoughts. Let's make a heated discussion in the comments section down below!


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