Lumber to gold ratio breaks down, suggesting a risk-off environment

Quick Take

• So far, 2023 has been a good year for Bitcoin and risk assets, with Bitcoin up 71%, Nvidia up 92%, and Meta up 68%.
• The S&P 500 is up 7% while the Nasdaq is up 20%
• However, the lumber-to-gold ratio indicates a risk-off environment, and the stock market has always followed a crash.

Highlighted are the areas where the lumber-to-gold ratio collapsed, and subsequently, the S&P 500 went down.

• 1987 Crash
• 1990 Bear Market
• 2000 Tech Bubble
• 2008 Lehman Crash
• 2011 Summer Crash
• 2018 4Q Correction
• 2020 Covid Crash

As Bitcoin is somewhat correlated to the US stock market this could mean further headwinds for Bitcoin.

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