Key Points:
The Nasdaq index increased 10% in the last month, while Bitcoin plummeted over 9%, according to CoinJournal research chief Dan Ashmore.
As a consequence, the 60-Day Pearson correlation between the two assets fell to minus 0.66, the lowest since 2018. The previous low for the Bitcoin-Nasdaq correlation was negative 0.49, which was achieved during last November’s FTX crisis.
Even when the Luna, Celsius, and FTX crises arose, the Bitcoin-Nasdaq correlation exhibited a declining trend last year. However, this is the period that shows a marked difference.
“Bitcoin correlation with stocks has broken trend and is now at a 5-year low. There have been a few notable episodes of decorrelation over past 18 months, but none bigger than what is currently happening,” Ashmore wrote.
According to Ashmore, the recent drop in the connection between Bitcoin and the Nasdaq index to a five-year low is certainly attributable to US cryptocurrency legislation. This week, the Securities and Exchange Commission (SEC) charged Binance, the world’s biggest cryptocurrency exchange, and Coinbase, the top U.S. exchange, with selling unregistered securities.
Fundamentally, Bitcoin traditionally tended to move in the same direction as the major corporations featured on the Nasdaq 100 index, prompting some financial experts to dismiss the digital asset’s usefulness as a diversifier. But, the current decorrelation may show them incorrect.
At the time of writing, BTC is trading at $25,112, and the Nasdaq 100 is at 15,152.12.
DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Harold
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