Bitcoin’s correlation with stocks hits a two-month low…Will they break up?
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Answer Bitcoin’s correlation with stocks hits a two-month low…Will they break up?
Bitcoin and the US stock market have been going hand in hand in the past months but in recent weeks the correlation has started to diminish.
Bitcoin’s recent rally saw greater divergence from the stock market.
While stock markets fell further on the news that the US would ban Russian oil, the world’s largest cryptocurrency surged more than 6% to cross $41,000.
Bitcoin outperformed stocks last month:
The largest cryptocurrency has stabilized in recent weeks, although it has faltered in line with stocks in the early stages of the Russian-Ukrainian conflict.
However, it has lost about 6% in the last 30 days, compared to a 9% decline in the S&P 500.Read:Find out how much Tesla achieved from the recent bitcoin price hike!
Data from the platform showedSidewalk“Bitcoin’s correlation with stocks and traditional assets has touched a two-month low over the past 30 days.
In the immediate aftermath of the invasion, traditional financial assets plummeted while cryptocurrencies rose, a sharp divergence from the previous month’s trend.
While Bitcoin’s bullish turnaround lacks complete convincing, the divergence indicates that investors briefly treated each asset class independently.
From Kaiko’s statement:
A key factor in this potential chapter is the increased regulatory interest after Russia invaded Ukraine, as the latter became the first country to officially request assistance with cryptocurrencies.
Concerns about Russia’s use of cryptocurrencies to bypass US sanctions also made many developed countries rush to pass comprehensive crypto regulations.
US President Joe Biden will sign an executive order later in the day that is widely expected to benefit cryptocurrency adoption, while the European Union will vote on a major crypto law next week.
This could foster adoption, and help crypto markets carve their way away from stocks and other risk-driven assets.
Bitcoin’s correlation with stocks is a trend that has been observed since 2021, when a great deal of institutional interest came into the market.Read:Ripple cites memos from 2012 to support its case against the SEC
While this interest has led to new highs, it has also seen the start of trading similar to traditional riskier assets.
Specifically, traders now view Bitcoin as similar to US technology stocks, which are also benefiting from increased liquidity in the market.
The Treasury Department will assess crypto risks under President Biden’s executive order, according to the US Treasury Secretary
BTC rises 8% and returns to the levels of 41 thousand dollars and LUNA leads the rally
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