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The correlation between bitcoin and US tech stocks has reached an all-time high. This assessment is provided by Bloomberg analysts.
The corresponding ratio, averaged over the last 40 days, was 0.66.
Data: Bloomberg.
A similar trend can be seen in the relationship between bitcoin and the S&P 500 index. According to Reuters analysts, since September, the correlation (60-day moving average) between them has increased from 0.1 to 0.41. They recalled that in 2017-2019 the coefficient was 0.01, according to the calculations of experts from the IMF.
Data: Reuters.
“Bitcoin doesn’t work as a hedge against inflation right now. It’s a risk indicator.”commented DailyFX strategist Nicholas Coley.
Analysts at Coin Metrics explained the fall in cryptocurrency prices with expectations of a faster pace of tightening of the Fed’s monetary policy. This distinguishes the current bearish cycle from the events of 2018, when traditional markets did not see downward momentum, they stressed.
According to experts, from January 1 to 24, the Nasdaq Composite index decreased by 12.5%, Bitcoin by 21%, Ethereum by 34%. Of those included in the Coin Metrics sample, only ATOM grew in price by 10%, while the fall of other crypto assets reached 49%.
Data: Coin Metrics.
Recall that in January, the IMF warned of the risks of “infection” of the stock and bitcoin markets.
Earlier, experts from MSCI reported on the growing influence of cryptocurrencies on the dynamics of securities portfolios.
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