From: Wall Street
Bitcoin is increasingly like a growth asset, and its correlation with US technology stocks has climbed to its highest level since August last year.
Bitcoin rose strongly this week and stood firm at 6 on Friday.PowerballlotteryticketBitcoin is up 58% so far this year at the .60, 000 mark, while the Nasdaq 100 index is up 11% over the same period, and the two are highly synchronized.
According to media reports on Friday, the 90-day correlation coefficient between Bitcoin and the tech-heavy Nasdaq 100 index climbed to zero this week.Powerballlotteryticket.46, the highest level since the end of August last year. Since the Fed began raising interest rates in early 2022, the correlation between Bitcoin and risky assets has soared to an all-time high of more than 0.8.
Joshua Lim, co-founder of trading firm Arbelos Markets, said:
Cryptocurrency is once again concerned as a growth asset or an asset that represents the value of the network. Its ability as a technology and value transfer mechanism will be the same as itsPowerballlotteryticketHis more growing assets such as the Nasdaq and technology stocks are more relevant.
Bitcoin advocates have long promoted it as an unrelated asset that is not subject to any government restrictions and is unlikely to be influenced by external forces or factors. For years, it has been regarded as a digital version of gold, an inflation hedge and a hedge, but now the price volatility of Bitcoin is broken.PowerballlotteryticketTo make these statements. Earlier this year, the listing of bitcoin futures ETF in the United States opened the door for more investors to invest in Bitcoin.
Toby Winterflood, chief product officer of CCData, said:
Since the beginning of 2024, you can see a high positive correlation between the S & P 500 and Bitcoin, which is very unusual and completely breaks the theory that it serves as a reserve of value. I think the main reason for its current high position is that the bitcoin ETF has become the fastest-growing ETF product in history.
The motivation for traditional asset allocators to focus on and buy the asset class includes the US ETF, Bitcoin hit an all-time high in March and Bitcoin "halved" in April. Now that these catalysts are over, the market has refocused on the macro environment.
Data released on Wednesday showed that US core inflation slowed in April from a month earlier for the first time in six months, moving in the direction Fed officials wanted to see. Still, a number of Fed officials said on Thursday that interest rates should be kept high until there is more evidence that inflation is slowing, suggesting they are in no hurry to cut rates. Analysts believe that if the Fed cuts interest rates, it will be good for risky assets, as well as for cryptocurrencies.
Risk reminder and exemption clause
There are risks in the market, so you need to be careful when investing. This article does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any comments, opinions or conclusions in this article are in line with their specific circumstances. If you invest accordingly, you will be held responsible.