Bitcoin’s one-year correlation to the Standard & Poor’s 500 index hit record highs as the leading cryptocurrency continues to trade in lockstep with traditional financial markets.

The realized correlation, which measures the relationship between two assets, reached 0.367 on Thursday, up from -0.06 on January 1, according to data from Coin Metrics. Bitcoin’s correlation to the benchmark index of U.S. stocks has made new all-time highs for the past three consecutive trading days. Before this, the previous high was on July 5, which lasted for one day. 

It’s worth noting that a coefficient of 0.367 is not overwhelmingly strong, but correlations on shorter-term bases are significantly higher. The closer a correlation coefficient is to 1.0, the more likely two things are to move in the same direction.

Bitcoin’s one-month correlation to the S&P, for example, reached a multi-year high of 0.79 on Wednesday, according to data from Skew, indicating a much stronger short-term correlation trend as levels of investor uncertainty and expected volatility remain high. Analysts expect the trend to continue and even strengthen.

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Historical one-year correlation of bitcoin to the S&P 500
Source: Coin Metrics

Bitcoin’s strong performance from March lows has fueled demand to buy and trade bitcoin, even with the coronavirus pandemic battering the economy. Investors are increasingly looking for inflation hedges like gold or bitcoin amid aggressive expansionary monetary policy, which has also pushed equity prices higher at the same time. 

See also: The Federal Reserve’s Declining Balance Sheet Is Bearish for Bitcoin. Or Is It?

Bitcoin has historically exhibited little to no correlation to traditional asset classes. But more consistent correlations are likely as the cryptocurrency space matures, according to Kevin Kelly, former equity analyst at Bloomberg and co-founder of cryptocurrency research firm Delphi Digital.

“One of the biggest reasons we haven’t seen these develop already is the average investor profile is unlike traditional markets, where large institutional players dominate,” Kelly said in a letter to clients.

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