Bernstein analysts flag decline in cryptocurrencies’ correlation with the US stock market

The correlation between cryptocurrencies and US equities and macroeconomic events is weakening amid bitcoin’s current flat price action. The Block reports, citing Bernstein researchers.

According to them, the market is balancing between bulls and bears, “awaiting further catalysts,” and its sensitivity to events in the traditional financial world “is no longer the same as before.”

The correlation of bitcoin with the Nasdaq Composite index in early February fell from 0.94 to 0.58.

Analysts also noted that regulatory obstacles are a bearish factor for the market, as is modest institutional adoption of cryptocurrencies. On the other hand, the weakening of correlation with equities is a bullish signal.

“A significant portion of stablecoin issuance (>50%) and global trading of digital currencies remains outside the United States,” the researchers added.

Earlier, American regulators issued a joint statement about potential risks arising from crypto-asset-linked companies.