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Bitcoin-Nasdaq 100 correlation hits 3-year low, hinting at potential decoupling

June 27, 2023

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A brand new report from Kaiko Analysis highlights that the correlation between Bitcoin and the tech-heavy Nasdaq 100 has dropped to simply 3%, the bottom degree in three years.

A current report from Kaiko Analysis discovered that the correlation between bitcoin and the tech-heavy Nasdaq 100 dropped to simply 3%, the bottom degree in three years. This implies a potential separation between the 2 belongings. In the meantime, the correlation between cryptocurrencies and gold reached its highest degree in years final week, pushing each belongings increased in 2023.

In the meantime, the correlation between the Nasdaq 100 and conventional danger belongings has steadily declined from a mean of 60% in 2022. However analysts mentioned the Nasdaq 100 is technically in a bull market, surging greater than 20% from its 2022 lows.

Kaiko Analysis analyst Desislava Ianeva mentioned the drop in correlation is basically as a consequence of Bitcoin being closely impacted by crypto-specific occasions, comparable to current regulatory developments. . Tech shares have not felt the identical influence, she defined.

The cryptocurrency market has skilled vital volatility lately, and whereas Bitcoin is usually regarded as a barometer of general market sentiment, its declining correlation with the Nasdaq 100 suggests their respective trajectories could also be completely different. suggesting. This may very well be an indication that issues are altering, as cryptocurrencies are performing increasingly independently of conventional tech shares.

Bitcoin, the most important cryptocurrency by market capitalization, faces regulatory scrutiny and authorized challenges in varied jurisdictions. These components, mixed with the nascent nature of the cryptocurrency market, make it extra delicate to particular occasions and developments.

Particularly, the Nasdaq 100 Index, which consists of a number of giant non-financial firms listed on the Nasdaq Inventory Trade, has risen considerably from its December 2022 low. This upward trajectory was pushed by sturdy earnings reviews, tech innovation and constructive market sentiment.

Because the cryptocurrency market continues to evolve, buyers and market contributors will intently monitor relative actions between Bitcoin and conventional inventory market indices. The decline in correlation with the Nasdaq 100 highlights the necessity for a nuanced understanding of the components that affect these markets and the significance of crypto-specific occasions in shaping the general panorama of digital belongings. It highlights that it’s rising.

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