• The 30-day correlation between Bitcoin and Nasdaq has dropped to its lowest since December 2021.
• This suggests that movements in US markets are becoming less relevant to BTC.
• Arcane Research’s report notes that institutional investors, who treat BTC as a risk asset, saw a rising presence in the market as one of the reasons behind the two assets being correlated.
The latest weekly report from Arcane Research has revealed an interesting trend in the crypto market: Bitcoin’s 30-day correlation with Nasdaq has fallen to its lowest since December 2021. This indicator measures how closely Bitcoin and another given asset performed during the past month and a positive value suggests BTC has been responding to changes in the price of the other asset by moving in the same direction, while a negative value implies BTC has been displaying opposite price action relative to the asset.
Now, the report from Arcane Research notes that the value of this metric has seen a plunge in recent days, with the Bitcoin 30-day correlation with Nasdaq dropping to just 0.29. This suggests that movements in US markets are becoming less relevant to BTC, and it is worth noting that the correlation was at a high positive value throughout most of 2022.
The report notes a few reasons behind the two assets being this correlated. First, institutional investors, who treat BTC as a risk asset, saw a rising presence in the market. In addition, the price of BTC has been rising steadily throughout the year, and this could have also impacted the correlation between Bitcoin and Nasdaq. Moreover, the growing popularity of DeFi has also been cited as a possible factor that could have contributed to the decrease in correlation between the two assets.
Overall, it is clear that while Bitcoin and Nasdaq still remain correlated, the relationship between the two assets is becoming more and more distant. This could signal a possible shift in the way investors view Bitcoin, as the asset is increasingly being seen as a separate asset class from traditional markets. As such, it is likely that we will continue to see a decrease in the correlation between the two assets in the coming months.