According to a JPMorgan report, Bitcoin shows the highest correlation with small-cap tech stocks, particularly in the Russell 2000 sector.
JPMorgan's Correlation Study
A team of JPMorgan analysts led by Nikolaos Panigirtzoglou found that both Bitcoin and altcoins show a strong correlation with small-cap stocks, but Bitcoin's correlation remains the highest.
Features of Crypto and Stock Correlation
Analysts argue that the stronger correlation with small-cap stocks is due to the reliance of cryptocurrencies on venture capital funding and blockchain innovation, which are typically the focus of smaller tech firms.
Impact on Cryptocurrency Market
The cryptocurrency market has maintained a structurally positive correlation with stocks since the pandemic: retail investors use leverage in both markets, and the nature of growth stocks is similar to that of cryptocurrencies.
JPMorgan analysts believe that Bitcoin's price trajectory will continue to be heavily influenced by the performance of the tech sector and broader market trends.
