The correlation between Bitcoin and US tech-sector stocks has hit a record high. Analysts cited Bloomberg.
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The corresponding coefficient, averaged over the last 40 days, stood at 0.66.
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A similar trend is also evident in the relationship between Bitcoin and the S&P 500 index. According to Reuters, since September the correlation (60-day moving average) between them has risen from 0.1 to 0.41. They noted that in 2017-2019 the coefficient stood at 0.01, according to IMF economists’ calculations.
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“Bitcoin is not functioning as a hedge against inflation. It is a risk indicator,” said DailyFX strategist Nicolas Kouli.
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Coin Metrics analysts explained the decline in cryptocurrency prices by expectations of a faster pace of Federal Reserve tightening. This distinguishes the current bear market from the events of 2018, when traditional markets did not experience downward dynamics, they noted.
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According to specialists, from January 1 to 24 the Nasdaq Composite fell 12.5%, Bitcoin by 21%, Ethereum by 34%. Among those in the Coin Metrics sample, ATOM rose 10%, while declines in other crypto assets reached 49%.
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In January, the IMF warned of contagion risks to stock and Bitcoin markets.
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Earlier, MSCI stated that cryptocurrencies were increasingly influencing the dynamics of portfolios of securities.
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