Bitcoin's relationship with the stock market has shifted dramatically, as recent analysis reveals it is now the least correlated to equities since the FTX crash in 2022. The source reports that this change comes amid a broader downturn in the cryptocurrency market, raising questions about the future dynamics between these asset classes.
Bitcoin's Significant Decline
According to analytics firm Santiment, Bitcoin has experienced a significant decline of 43% over the past six months, contrasting sharply with the S&P 500, which has seen a 7% increase during the same period. Historically, Bitcoin has maintained some correlation with traditional stocks, particularly the S&P 500, but this trend appears to have broken down recently.
Weakest Correlation Since November 2022
The current decoupling is notable as it marks the weakest correlation Bitcoin has exhibited with stocks since November 2022, following the collapse of the FTX exchange. Unlike previous instances of temporary disconnection, this latest trend has shown persistence, with Bitcoin underperforming while traditional markets remain relatively stable.
Uncertain Future of Decoupling
The future of this decoupling is uncertain, as historical patterns suggest that assets that break correlation often tend to reconnect over time. Investors and analysts will be closely monitoring these developments to understand the implications for both Bitcoin and the broader financial markets.
Recent analysis by Aaron Dishner highlights potential risks for Bitcoin and other digital assets, contrasting with Bitcoin's current decoupling from traditional markets. For more details, see risks for Bitcoin.
