Willy Woo: Bitcoin to Decouple From Traditional Markets Soon

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In Brief
  • Analyst Willy Woo believes that bitcoin is heading toward a decoupling from stocks, powered by bitcoin's internal adoption.

  • He believes that bitcoin's movement in the future will be determined by organic adoption, not external investment.

  • Woo believes that the adoption fundamentals are the single most important factor in bitcoin's future.

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On-chain market analyst Willy Woo believes that bitcoin’s market movement will soon cease to correlate with that of traditional markets, as has been the case until now.



Writing on his Twitter account, Woo shared data from Glassnode showing a clear multiyear uptrend in bitcoin adoption.

In his view, this is part of a growing body of evidence that bitcoin now functions as a long-term store of value for a growing number of ‘HODLers.’ This, he says, will exert more influence over the bitcoin price than “hedge fund and whale traders,” which will effectively decouple bitcoin’s performance from the S&P 500.



Background of Woo’s Prediction

Woo’s prediction comes against a backdrop of a significant correlation between bitcoin and stocks. This has led to fears in some quarters that macroeconomic factors such as interest rates, unemployment and inflation could exert influence over the bitcoin price — and by extension the entire crypto market, which largely defers to bitcoin.

Not every analyst, however, agrees that there is in fact a correlation. Heisenberg Capital founder Max Keiser believes that in fact “bitcoin…is inversely correlated to the USD — not the stock market.” He adds, “Don’t be fooled by randomness.”

The charts below illustrate an apparent correlation between stocks and bitcoin over a five-year period

Source: CoinMarketCap
Source: TradingView

Woo’s Decoupling Prediction

According to Woo, bitcoin is nearing a point in its life cycle where something he describes as “internal adoption” is exerting greater influence over market movements than investment from external sources. Explaining what “internal adoption” means, he wrote in a tweet:

“It’s adoption from long-term organic growth of HODLers. As opposed to hedge funds and whale traders moving capital in and out of BTC as they trade and hedge positions.”

Source: Twitter

Woo’s view is that traditional investors interact with bitcoin as a hedge, with the unintended consequence of creating correlation. This position on mainstream bitcoin investment is in line with that described by Fortune Brainstorm Finance Co-Chair Robert Hackett in June 2020.

According to Woo, however, bitcoin’s user adoption rubicon has already been crossed. This, he says, effectively reduces the importance of institutional investment as a fundamental driver of bitcoin’s price.

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David is a journalist, writer and broadcaster whose work has appeared on CNN, The Africa Report, The New Yorker Magazine and The Washington Post. His work as a satirist on 'The Other News,' Nigeria's answer to The Daily Show has featured in the New Yorker Magazine and in the Netflix documentary 'Larry Charles' Dangerous World of Comedy.' In 2018, he was nominated by the US State Department for the 2019 Edward Murrow program for journalists under the International Visitors Leadership Program (IVLP). He tweets at @DavidHundeyin

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