Block Scholes, a crypto analytics firm, states that Bitcoin is no longer correlated to U.S. stocks.

Bitcoin’s (BTC) fortune is no longer tied to sentiment in the U.S. stock markets.

The 90-day rolling correlation of changes in bitcoin’s spot price to changes in Wall Street’s tech-heavy equity index, Nasdaq, and the broader index, S&P 500, has declined to near zero. That’s the lowest in two years, according to data tracked by crypto derivatives analytics firm Block Scholes.

“It [the correlation] is now at the lowest level observed since July 2021, when BTC was between its twin peaks in April and November,” Andrew Melville, research analyst at BlockScholes, said in an email.

“The fall in correlation has happened as both assets have retraced losses sustained throughout last year’s tightening cycle,” Melville added.

The dwindling correlation with traditional risk assets means that crypto traders focusing solely on traditional market sentiment and macroeconomic developments may face disappointment.

ETF narrative

The recent spot bitcoin exchange-traded fund (ETF) filings by BlackRock (BLK), Fidelity, WisdomTree (WT), VanEck, Invesco (IVZ) and others have brought optimism to the crypto market.

Since BlackRock’s filing on June 15, bitcoin has produced a return of 25%, ignoring the range bound activity in the U.S. stock indices.

Per Ilan Solot, co-head of digital assets at Marex Solutions, the ETF narrative can be broken down into three parts – frontrunning the launch, flows post-the-spot ETFs go live and validation of crypto as an asset class.

“Investment product flow in coming months could be a litmus test for the latter, so I’ll be watching it closely,” Solot tweeted .

To the bears’ dismay, investor interest in exchange-traded products has increased since June 15.

“Globally, BTC ETPs experienced inflows of 13,822 BTC in June, with the inflows kicking in after the BlackRock announcement on June 15,” Vetle Lunde, senior research analyst at K33, said in a note to clients on Tuesday, discussing the impact of the ETF narrative. “The flows have been strong across jurisdictions, with Canadian and European spot ETPs and U.S. futures ETFs all experiencing solid inflows.”

While the ETF narrative is currently in the driver’s seat, some macroeconomic factors, like potential fiat liquidity pressures, still warrant attention, analysts told blockchain.

Bitcoin changed hands at $30,830 at press time, per blockchain data.

Edited by Parikshit Mishra.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Bitcoin

Microstrategy’s Aggressive Bitcoin Acquisition Strategy Bolsters Crypto Market

Bitcoin's price experiences a temporary correction following Microstrategy's successful acquisition of $600M worth of...

Bitcoin

Breaking News: A Crypto Comedy Unfolds!

Stay up-to-date on the newest blockchain technology advancements, funding news, and deals for Nov. 2-8, with live upd...

Bitcoin

Bitcoin price plunges after rejection, bears aim for fresh lows.

Bitcoin price is experiencing a slight correction from the $30,350 level. BTC is displaying some bearish indications ...

Bitcoin

Coinbase CEO Brian Armstrong announces integration of Bitcoin Lightning network.

The decision was made following a thorough investigation by Viktor Bunin, Protocol Specialist at Coinbase, into the p...

Markets

Observers predict a possible downturn in Bitcoin and cryptocurrency prices due to an upcoming liquidity shock.

According to analysts, the improvement in liquidity conditions this year has resulted in an increase in the value of ...