• The correlation between Bitcoin and the Nasdaq has reached its lowest point since 2018.
• The Nasdaq is up 10% in the last month, while Bitcoin is down 9%.
• This break in correlation surpasses what was seen in November 2022 during the FTX collapse.
Bitcoin Correlation with Stocks at 5-Year Low
The US Federal Reserve’s decision to pause interest rate hikes this week led to a surge of activity on stock markets across the country. The S&P 500 and Nasdaq have both risen significantly over the past month, but Bitcoin has been left behind – trading below $25,000 for the first time in three months. A deep dive into Bitcoin’s underlying price movement shows that it typically trades closely with stocks, however a break in this correlation has occurred over the past month that surpasses what was seen in November 2022 when BTC fell to $15,000.
Correlation Between Bitcoin and Nasdaq at Lowest Point Since 2018
Head of Research Dan Ashmore explains that the correlation between Bitcoin and stocks has been steadily decreasing since early 2022. This current decline is now at its lowest point since 2018, with a break even greater than what was seen during the FTX collapse last year when BTC plummeted while stocks increased off positive inflation readings.
Nasdaq Surges 10% While Bitcoin Falls 9%
The Nasdaq’s increase of 10% over the past month stands as an impressive recovery from a third of its value lost in 2022 – although it remains 15% below its all-time high from 2021. On the other hand, despite seemingly being unaffected by news from Wall Street, BTC prices have decreased by 9%. This suggests that investors are growing more apprehensive about crypto’s future due to US regulatory crackdowns spreading fear throughout the industry.
Suspicions That Break Is Not Temporary
It appears that some investors are not confident that this latest break will be temporary like it has been before; many suspect it could be more permanent due to uncertainty surrounding regulation and adoption of cryptocurrency worldwide. With governments taking increasingly strict stances against digital assets, traders may be less likely to invest long-term or move their funds into riskier assets such as crypto.
Ultimately, it remains unclear whether this decrease in correlation between cryptocurrencies and traditional markets will stick or if they will eventually return to trading side-by-side again once global economic conditions improve; only time will tell. With increasing regulatory scrutiny worldwide however, investors should remain alert for any changes or unexpected developments within this space that could affect market sentiment further down the line.