Bitcoin-Ether Correlation Weakest Since 2021, Hints at Regime Change in Crypto Market

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The tokenomics of bitcoin and ether will continue to diverge, weakening the correlation between the two even further, analysts said. Reports godbole17.

Bitcoin and ether , the world's top two cryptocurrencies by market value, moved in tandem for much of 2022. That positive relationship has weakened this year, signaling an impending regime change in the market.

As of Monday, the 30-day rolling correlation between changes in bitcoin and ether prices was 77%, the lowest since 2021 and notably weaker than 96% seen two months ago, according to crypto data provider Kaiko. Ether, in the past, has decoupled from bitcoin for brief periods. The latest weakening of correlation may be long-lasting, meaning bitcoin, the world's largest and most liquid digital asset, may no longer anchor ether and the broader market, according to Pulkit Goyal, Vice President of trading at OrBit Markets, an institutional liquidity provider of options and structured derivatives in digital assets.

"What we are seeing could be the beginning of a long-term regime change. As Ethereum has shifted from PoW to PoS, the economics of supply and demand underlying the 2 tokens will continue to diverge," Goyal told CoinDesk. "Bitcoin will cement its status as the"digital gold" or a blue-chip stock while Ether will be seen as a growth stock or an emerging market," Goyal added.

 

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