Bitcoin (BTC), the leading cryptocurrency, has further diverged from its correlation with tech stocks, indicating that crypto assets are forging their own path. According to data from crypto research platform Kaiko, the correlation between BTC and the top US stocks tracked by the Nasdaq 100 index has plummeted to its lowest level in almost three years.
Throughout June, the correlation between Bitcoin and the Nasdaq 100 stands at a mere 3%, a stark contrast to the average correlation of 60% observed in 2022. This divergence comes as Bitcoin outperformed the broader tech index, with gains of almost 14% compared to a mere 3% for the Nasdaq 100.
The recent surge in Bitcoin’s price has played a significant role in this decoupling. After dipping below $25,000 due to regulatory concerns in the US, Bitcoin experienced a sharp recovery following BlackRock’s application to launch a spot-Bitcoin exchange-traded fund (ETF). This move was followed by similar filings from other traditional finance giants like Invesco, Valkyrie, WisdomTree, and HSBC. The increased optimism surrounding potential institutional crypto adoption pushed BTC above $30,000 for the second time in 2023.
The diminishing correlation between Bitcoin and the Nasdaq 100 is a testament to the evolving dynamics between the stock market and the crypto sector. As the largest digital asset by market capitalization, Bitcoin’s newfound independence highlights its resilience and growing influence in the financial landscape. Market analysts have long been interested in studying the relationship between these two variables, and the current data reveals the lowest correlation since the US Federal Reserve signaled rate hikes in early 2022.
Additionally, the latest Bitcoin price analysis reveals BTC trading at $30,363, indicating a minor 0.30% increase in the past 24 hours. However, over the past week, the cryptocurrency has surged by nearly 15% and has gained an impressive 83% since the beginning of the year. Notably, Bitcoin has managed to stay above the critical 200-week exponential moving average (EMA), with a former resistance zone now acting as support, setting the stage for a potential rally to $38,000, according to renowned crypto market expert Michaël van de Poppe.
The implications of Bitcoin’s decoupling from tech stocks extend beyond its immediate price movements. This shift signifies a maturing market, where crypto assets are no longer solely reliant on the performance of traditional financial instruments. The increasing independence of Bitcoin may attract a new wave of investors who view cryptocurrencies as a separate asset class, diversifying their portfolios and hedging against potential risks in the stock market.
As Bitcoin continues to chart its own course, its decoupling from tech stocks presents an opportunity for the wider crypto sector to establish itself as a significant player in the global financial landscape. The evolving relationship between traditional markets and cryptocurrencies will undoubtedly shape the future of investing and pave the way for increased institutional adoption of digital assets.
To conclude, Bitcoin’s correlation with tech stocks hitting a three-year low underscores its growing independence and influence. The data reflects a changing landscape where cryptocurrencies are carving out their own path, attracting investors seeking alternative assets. With Bitcoin leading the charge, the wider crypto sector is poised to redefine the financial industry, ultimately reshaping how we perceive and invest in the global markets.