The 30-day correlation coefficient, which measures how closely the two assets' price movements are linked, has fallen to around 0.2, down from 0.8 a year ago. This suggests that Bitcoin's price moves are now less aligned with those of tech stocks. According to Stephane Ouellette, CEO of institutional digital asset platform FRNT Financial Inc., the changing correlation is likely a result of evolving investment strategies and increasing adoption of digital assets.
The change in correlation coincides with Bitcoin's first monthly decline in 2023, while the Nasdaq 100 enjoyed a nearly 8% boost, largely thanks to heightened interest in artificial intelligence. This divergence illustrates a significant decrease in the correlation between Bitcoin and tech stocks compared to the previous year. This shift might bring a measure of idiosyncratic risk back to the cryptocurrency market. However, some experts, such as Ouellette, speculate that in the long term, this detachment might be beneficial for digital assets, allowing their performance to be less influenced by the broader tech sector.
Bitcoin's price currently hovers around $27,000, marking a significant downturn from its highs, and highlighting Novogratz's point about the lack of institutional enthusiasm.
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Source: cleantechnica - 🏆 565. / 51 Read more »