Bitcoin Breaks Free from Nasdaq Correlation
Bitcoin (BTC) has recently shown a significant decrease in correlation with Nasdaq (NDX), with the 40-day correlation dropping to zero. This is a departure from the past four years, during which BTC moved in sync with the tech-heavy equity index on Wall Street. Data analyzed by research provider Fairlead Strategies reveals that the correlation between the two now stands at zero. Correlation values are determined using a mathematical formula that examines the price movements of both the index and BTC over time. A positive correlation indicates a strong relationship, while negative figures indicate a lack of correlation.
Correlation With Nasdaq Drops Amid Spot ETF Optimism
The recent decoupling between Bitcoin and Nasdaq can be attributed to the crypto market’s focus on the anticipated launch of a spot BTC exchange-traded fund (ETF) in the United States. The Securities and Exchange Commission (SEC) is expected to make decisions on nearly a dozen spot ETF applications, potentially leading to broader adoption of Bitcoin. This breakdown in correlation means that Bitcoin can now serve as a diversification tool within investment portfolios. Fairlead Strategies predicts that BTC will remain independent from Nasdaq for the foreseeable future.
Bitcoin Surges Above $47,000
On Monday, Bitcoin saw a surge above the $47,000 mark for the first time since April 2022. The surge was primarily driven by growing anticipation of a landmark decision on the approval of a spot-based Bitcoin ETF in the United States. Bloomberg analysts are increasingly optimistic about the approval of a spot Bitcoin ETF in the United States, with odds exceeding 90%. However, there is still a small possibility of rejection by the Securities and Exchange Commission (SEC). Nevertheless, Bitcoin’s value has experienced a sharp increase, reaching a 19-month high of $47,190.
Hot Take: Bitcoin’s Decoupling from Nasdaq
The recent decoupling of Bitcoin from Nasdaq marks a significant shift in their correlation. For years, BTC has moved in tandem with the tech-heavy equity index, but now the 40-day correlation stands at zero. This change can be attributed to the crypto market’s focus on the anticipated launch of a spot BTC ETF in the United States. The potential approval of this ETF and other upcoming events are expected to keep the correlation between Bitcoin and Nasdaq low in the coming months. As Bitcoin continues to break free from traditional market correlations, it solidifies its position as a diversification tool within investment portfolios.
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