The financial markets data provider Kaiko reported that the correlation between Bitcoin and the Nasdaq 100 slumped to just 3 per cent
Bitcoin and Nasdaq 100 have reached their lowest correlation in three years, suggesting a possible splitting is in the works, as per a new report from Kaiko Research. Concurrently, the cryptocurrency and gold reached the highest correlation in many years last week, with both assets rallying this year.
The financial markets data provider reported that the correlation between Bitcoin and the Nasdaq 100 slumped to merely 3 per cent. The Nasdaq tracks the performance of the biggest and most actively-traded non-financial firms listed on the Nasdaq stock exchange.
In the meantime, the index’s correlation with conventional risk assets has continuously weakened in 2023 from an average of 60 per cent in 2022. As per experts, though, the Nasdaq 100 has technically entered a bull market, over 20 per cent higher since its December 2022 lows.
Dessislava Ianeva, research analyst at Kaiko, told Decrypt that the primary cause for the dropping correlation is that Bitcoin has been largely affected by crypto-specific events, such as the recent regulatory environment. Laneva stated this has not affected tech equities to the same level.
A lot of de-risking has already taken place last year with many institutional investors leaving the market, she said, observing that this means that these investors are unlikely to sell both crypto and tech equities concurrently.
The firm observed on Monday that the difference in volatility between crypto and tech stocks had hit its highest level since the FTX collapse.
In the meantime, as per another Kaiko report, Bitcoin and gold have acted in a similar way, with their correlation soaring past 50 per cent. Although gold has been in the red during the month, it is up year-to-date, reaching its all-time peak of $2k in May, as per Yahoo Finance. In the meantime, the cryptocurrency is seeing a BlackRock rally, exceeding $31k last week.
The data research platform argued that on-chain data shows a rise in long-term bitcoin holders, suggesting bitcoin might be joining gold as an instrument that safeguards investors during times of uncertainty.
