Recently, Bitcoin has been perceived as a classic risk-on asset, similar to stocks on NASDAQ and S&P 500. Here we review the price correlation and the factors influencing the market.
Correlation of Bitcoin with Traditional Stocks
Over the past year, Bitcoin has shown a 76% correlation with the NASDAQ 100 index. This indicates a growing alignment of its behavior with the dynamics of stocks in the tech sector.
Impact of Federal Reserve Decisions
The reduction in Bitcoin's volatility allows for a better understanding of macroeconomic factors affecting traditional stocks. Anticipation of a possible rate cut by the Federal Reserve may impact the prices of both cryptocurrencies and equities.
Investment Flows into Bitcoin ETFs
In recent days, there has been a surge in investment flows into Bitcoin ETFs, totaling over $1.9 billion. This suggests that large investors are anticipating confirmation of rate cuts by the Federal Reserve.
Thus, the current changes in the perception of Bitcoin as a risk-on asset underline its connection to traditional financial markets. Expectations of macroeconomic stability may play a crucial role in the future price dynamics.
