Bitcoin's Price Moves Decoupled from Oil Prices

The relationship between oil prices and Bitcoin's value has been extensively studied over the years. A recent analysis of five years' worth of data from the Federal Reserve Economic Data (FRED) and market aggregators such as Coingecko and Coinmarketcap reveals no measurable link between oil prices and Bitcoin's price movements.

The study found that daily, weekly, and monthly correlations have been almost zero. Even during periods of significant oil price volatility, such as the Iran conflict this year, Bitcoin's price has shown little correlation with oil.

For instance, over the past 12 months, WTI crude oil prices jumped around 40%, while Bitcoin is down around 25%. However, most of Bitcoin's fall came before the war started in February. Meanwhile, from February to May, Bitcoin advanced by around a quarter, while oil stayed around 50% above its pre-war price.

Researchers at Binance Research also conducted a study on the relationship between oil prices and Bitcoin's value over a 10-year period. They found that during periods of unprecedented monetary easing, such as in 2020-2022, there was a significant positive correlation between oil prices and Bitcoin's value.

However, this correlation is best explained by a shared liquidity factor rather than any direct causal link. The study also showed that oil price shocks increase Bitcoin's short-term volatility but do not set its price direction.