According to crypto derivatives analysis firm Block Scholes, the correlation between Bitcoin (BTC) and US stocks, particularly the Nasdaq and S&P 500, has reached its lowest level since July 2021.
Crypto Analysis Firm Block Scholes Says Bitcoin Is No Longer Associated With US Stocks
The 90-day correlation of changes in Bitcoin's spot price to changes in these stock indices drops to almost zero, suggesting that Bitcoin's fate is diverging from sentiment in traditional markets.
Andrew Melville, a research analyst at Block Scholes, noted that the diminishing correlation occurred as both Bitcoin and stocks recovered from the losses suffered during the previous year's tightening cycle.
This suggests that the factors driving the two asset classes diverge, leading to a weakening correlation.
It also means that investors may no longer find strong predictive value in examining the movements of the equity markets when analyzing Bitcoin's price behavior.
Recent applications for spot Bitcoin exchange-traded funds (ETFs) by major financial institutions like BlackRock, Fidelity, and VanEck have brought optimism to the crypto market.
Despite limited activity in US stock indexes, Bitcoin has yielded 25% since BlackRock's application on June 15.
*Not investment advice.