• Bitcoin’s correlation with the Nasdaq 100 has fallen to just 3% in June, down from the overall 60% in 2022.
• BTC price has outperformed the stock index year-to-date and over the past year, fueled by news of a potential BlackRock ETF filing.
• Bitcoin’s and Nasdaq 100 trading trajectory have diverged significantly since mid-2022, leading to a falling correlation between them.
Bitcoin’s Correlation with Nasdaq Falls
The market data research platform Kaiko released an analysis today that showed Bitcoin’s (BTC) correlation with the Nasdaq 100 had dropped to just 3%. This is down from its overall 60% in 2022 and suggests that the cryptocurrency is increasingly decoupling from traditional risk assets like tech stocks.
Bitcoin Outperforming Nasdaq YTD & Past Year
BTC has been outperforming Nasdaq equities both year-to-date (YTD) and over the past year. The cryptocurrency rose to a new YTD price high last week after news of a potential spot Bitcoin exchange-traded fund (ETF) application by global asset manager BlackRock emerged. Over this period, BTC is up more than 108% YTD and 72% over the past year, while the Nasdaq 100 has only gained about 35% YTD and 22% over the past year.
Diverging Trading Trajectory Since Mid 2022
Kaiko researchers noted that since mid-2022, Bitcoin and the Nasdaq 100 trading trajectory began to diverge significantly which led to a falling correlation between them. This was further enhanced by double digit gains made by BTC in June as it continued to break away from traditional stocks.
Negative Sentiment Amid Regulatory Actions
Despite negative sentiment permeating through markets following regulatory actions against Binance and Coinbase earlier this month, BTC continued to outperform traditional risk assets like equities even during banking sector turmoil. This week saw another rally for BTC prices as stocks broke their winning streak on macroeconomic fears leading into June 26th when Kaiko released their analysis on plummeting correlations between crypto assets such as Bitcoin and tech stocks like those found on Nasdaq 100 indices.
Given current trends, it appears that Bitcoin is increasingly decoupling itself from other traditional risk assets like tech stocks found on indexes such as NASDAQ 100 indices. While correlations may fluctuate depending on how markets are performing at any one time, it seems clear that Bitcoin’s long term outlook continues to be bullish compared to these other assets despite short term dips or corrections experienced throughout 2021/22 so far.