The Similarity Between Bitcoin And Big Tech Stocks Has Reached New Highs.
The Nasdaq 100 index indicates that the association between bitcoin and big tech stocks is strengthening. If big tech stocks tank, Arthur Hayes believes that will result in a decline in the price of Bitcoin and Ethereum.
Bitcoin’s ties to other markets are strengthening, according to Bloomberg, which reports that the market’s most valuable asset is becoming more correlated with large tech equities. BTC prices are increasingly correlated with the Nasdaq 100 index, especially since the onset of the pandemic.
The 40-day correlation between BTC and the Nasdaq 100 index hit 0.6945 on April 8, according to Bloomberg. The stronger the correlation, the closer it is to one.
The association raises some doubts about bitcoin’s suitability for diversification. Proponents of BTC have been pushing the commodity as a suitable investment alternative for years due to its lack of ties to other markets.
As more investors have entered the market, however, the absence of linkage has faded.
There has been a developing narrative about how institutional investors are controlling how the market responds since the beginning of the year. As a result, cryptocurrencies have become “mainstream,” with the market behaving similarly to regular markets.
Some people still believe that BTC is a suitable asset for diversification, and that investing in bitcoin may be used as an emergency fund. While the former premise may no longer be valid when the cryptocurrency’s price rises, the latter undoubtedly remains. Professional investors predict that cryptocurrency will become more widespread, increasing its overall worth.
Arthur Hayes, the former CEO of BitMEX and co-founder of 100x, is a frequent commentator on market movements, and he recently commented on the growing correlation between Bitcoin and the Nasdaq 100 index. According to Hayes, if the latter tanked, Bitcoin and Ethereum would follow suit.
Hayes claims that rising interest rates, global fiat liquidity conditions, and slowing economic growth will damage big tech, claiming that the correlation is “not what we want.” As the asset and large tech grow in lockstep, this will have an impact on BTC and ETH.
Hayes stated earlier this year that the global financial order was undergoing a transition as a result of Russia’s sanctions. He believes that a new period is approaching in which gold and bitcoin will reign supreme, and that both assets will benefit from it. He believes bitcoin will rise to an astounding price of $1 million.
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