Bitcoin’s correlation with stocks drops to record levels in 2022
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Answer Bitcoin’s correlation with stocks drops to record levels in 2022
Bitcoin’s performance is slowly and gradually detaching from the stock market.
Currently, Bitcoin’s correlation with the stock market has fallen to its lowest level in 2022.
The 40-day correlation coefficient between bitcoin and the Nasdaq 100 has fallen below 0.5 levels not seen since January, according toBloomberg“.
By comparison, the correlation was around 0.6 at the end of last month and rose to 0.85 in May.
A Bloomberg statement said:
If the positive correlation continues to ebb, it could raise questions about whether the battered default assets are closer to rock bottom and poised for a recovery.
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Bitcoin has followed the stock market somewhat since mid-2021, but it hasn’t been quite as pronounced as it was in May 2022.
Stocks and cryptocurrencies fell side by side days after the Federal Reserve announced a 0.5% interest rate hike, a record not seen in 22 years.
Bitcoin fell further in June as inflation continued to rise and the Federal Reserve pursued a more aggressive policy.
Bitcoin is now trading near price levels in late 2020, while the Nasdaq 100 trends are at yearly lows.
The price of Bitcoin almost held its level in the face of short-term fluctuations after the 9.1% CPI report for the month of June last Wednesday.
On the other hand, stocks fell on Tuesday in anticipation of worrying results.
Bloomberg anchor Tim Stonovic highlighted this discrepancy on Thursday, writing on Twitter:
Big Selling Stocks But Bitcoin Doesn’t Crash.
Sam Bankman told Friede, CEO of FTX, last week that he saw no reason to believe that the cryptocurrency had not hit bottom yet.
he added:
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I think the backtracking that should have happened has happened.
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