Eric Jackson Says Tom Lee Is Right About Bitcoin Leading Stocks – But The Signal Is Too Noisy To Bet On

Jackson said the pattern is statistically real but too noisy to provide a reliable trading edge over simply buying and holding stocks.

• Eric Jackson found that Bitcoin has historically outperformed the S&P 500, supporting Tom Lee’s broader thesis.
• He explained that the S&P 500 gained an average of 1.46% following a positive month for Bitcoin. 
• After a negative month for Bitcoin, the S&P averaged +0.23%. 

EMJ Capital founder Eric Jackson put FundStrat’s Tom Lee to the test over his assertion that crypto has historically led the stock market by about a month. Jackson confirmed Lee's basic observation was statistically sound but deemed the resulting trading signal too noisy to trade.

Analyzing 143 months of Bitcoin (BTC) and S&P 500 data going back to September 2014, Jackson wrote on his Substack on Tuesday that the pattern was statistically correct. 

He explained that the S&P 500 gained an average of 1.46% following a positive month for Bitcoin. After a negative month for Bitcoin, the S&P averaged +0.23%. 

The Signal Fades Fast

Jackson found the effect moved faster than commonly assumed. Rather than unfolding over a full month, 78% of the total three-month response happened within the first 15 days after a Bitcoin move, and the signal had essentially disappeared by the fourth week.