According to a new report from financial markets data provider Kaiko Research, the correlation between Bitcoin and the tech-heavy Nasdaq 100 has reached its lowest level in almost three years. The Nasdaq 100 tracks the performance of the largest and most actively traded non-financial firms listed on the Nasdaq stock exchange. Kaiko Research also tweeted that the correlation has plummeted to just 3% in June.
#Bitcoin’s correlation with the tech-heavy Nasdaq collapsed to just 3% in June, hitting its lowest level in nearly three years. pic.twitter.com/BUbijQiVv9
— Kaiko (@KaikoData) June 29, 2023
Dessislava Ianeva, a research analyst at Kaiko, commented that the decline in correlation is due to the significant impact of the recent regulatory environment on Bitcoin and other cryptocurrencies. She noted that tech equities have been relatively less affected in such a scenario.
Ianeva also mentioned that many institutional investors in the market have already taken steps to reduce risk last year, which means they are unlikely to sell both cryptocurrencies and tech equities simultaneously. Kaiko’s weekly data debrief stated that the volatility gap between crypto and tech stocks has reached its highest level since the FTX fiasco.
Furthermore, there has been a notable increase in the correlation between cryptocurrencies and gold in the past week, with both assets performing well in 2023. The correlation between the index and conventional risk assets has also been rapidly declining this year, from an average of 60% in 2022. However, analysts suggest that the Nasdaq 100 has entered a bullish phase and has risen by 27% since its December 2022 lows.
According to the data debrief report from Kaiko, Bitcoin and gold have been exhibiting similar price patterns, with their correlation surpassing 50%. Kaiko also tweeted that decentralized finance (DeFi) tokens are experiencing a rally and outperforming other crypto sectors following the announcement of a BlackRock ETF.
#DeFi tokens are gaining momentum, outperforming other crypto sectors since the BlackRock ETF announcement. pic.twitter.com/237AO8JUDG
— Kaiko (@KaikoData) June 27, 2023
The introduction of the BlackRock Bitcoin ETF has had a significant impact, fueling a Bitcoin bull run that saw the cryptocurrency surpass $31,000 last week. This development has also sparked optimism among crypto enthusiasts, who believe that the ETF application is likely to receive approval from the US Securities and Exchange Commission (SEC).
