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Bitcoin’s Correlation with Tech Stocks at Highest Since August 2023: Bloomberg

According to Bloomberg markets researcher Maria Torres, Bitcoin’s correlation with tech stocks is at a new nine-month high. This is interesting to note ]as, generally speaking, the largest cryptocurrency by market capitalization is often correlated with Gold and the stock market in general but not with tech stocks. It breathes new life into the supposition that Bitcoin will become a mainstay growth asset shortly, like tech stocks.

Bitcoin-Nasdaq 100 Correlation

According to Torres, the correlation coefficient between Bitcoin and the Nasaq-100 (the main index for tech stocks) reached a high of 0.46. A coefficient of 1 means that the two asset classes are moving in sync with each other, while a coefficient of -1 means that they are acting opposite to each other. So, we are heavily biased towards a correlation during the last eight months or so, with a coefficient close to 0.5. 

This is the highest level since August of last year. Bitcoin has surged more than 250% since August to reach as high as $73k at one point this year. Tech stocks have also been doing really well, with beneficiaries of the AI revolution like OpenAI and Nvidia leading the way.

Is Bitcoin Becoming a Growth Asset in the Conventional Market?

Bitcoin has been criticized by regulators and naysayers over the years because of its volatile nature but praised by proponents as a means of strong financial growth. The correlation with tech stocks shows that the market is ready to see the premier digital currency as a growth asset similar to the latter. The success of spot Exchange-Traded Funds (ETFs) has considerably changed Bitcoin’s game and brought it to the forefront.

According to Joshua Lim, the co-founder of trading firm Arbelos Markets:

“People are refocused on crypto as a growth asset or an asset that represents network value…., The ability of it as a technology and transfer of value mechanism, and that means that it’s gonna be more correlated to other assets that are also pretty growthy like Nasdaq, tech equities, those sorts of things”.

However, this doesn’t sit well with Bitcoin proponents, who see BTC as an independent asset that isn’t swayed by action in the rest of the market. They see it as an outsider who isn’t swayed by government policy and the markets.

Considering the crypto market’s multi-trillion-dollar size, some correlations will likely happen with time. The Bitcoin-Gold correlation is the most interesting one, even as the former has outperformed the bullion market considerably over the years.

Read More: Bitcoin’s Correlation with Tech Stocks at Highest Since August 2023: Bloomberg

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