Crypto News: Bitcoin’s Correlation with Nasdaq and S&P 500 Hits Lowest Level Since July 2021

The post Crypto News: Bitcoin’s Correlation with Nasdaq and S&P 500 Hits Lowest Level Since July 2021 appeared first on Coinpedia Fintech News

In a surprising twist, renowned crypto analytics firm Block Scholes has revealed that Bitcoin’s fate is no longer tied to U.S. stock market sentiment. 

According to Block Scholes’ data, the 90-day rolling correlation between Bitcoin’s spot price and the Nasdaq and S&P 500 indices has plummeted to near zero. This is the lowest level observed in two years, specifically since July 2021, when Bitcoin experienced its peak between April and November.

Andrew Melville, a research analyst at Block Scholes, explains that this fall in correlation coincides with both Bitcoin and U.S. stocks retracing losses incurred during last year’s tightening cycle. Perhaps he emphasized that this decoupling of Bitcoin from U.S. stocks presents a fresh perspective on the market dynamics and highlights the growing maturity of the cryptocurrency space.

For investors, it means that Bitcoin’s price movements may no longer be as closely linked to traditional stock market trends. This newfound independence could offer diversification benefits for those looking to allocate their portfolios across different asset classes.

Also Read: Crypto Vs SEC: Legal Expert Claims SEC May Be Violating the Law in Cryptocurrency Regulation

ETF Filings and Increasing Investor Interest Add to the Shifting Landscape

Shifting our focus to recent developments, the spotlight is on the much-anticipated Bitcoin exchange-traded fund (ETF) filings. Industry giants such as BlackRock, Fidelity, WisdomTree, VanEck, and Invesco have brought renewed optimism to the crypto market. Since BlackRock’s filing on June 15, Bitcoin has generated a remarkable 25% return, regardless of the range-bound activity seen in U.S. stock indices.

Ilan Solot, co-head of digital assets at Marex Solutions, breaks down the ETF narrative into three parts: frontrunning the launch, post-launch flows, and the validation of cryptocurrency as an asset class. Solot emphasizes the importance of investment product flow in the coming months as a litmus test for the latter, keeping a close eye on the developments.

Globally, Bitcoin ETFs witnessed significant inflows of 13,822 BTC in June, with the momentum building up after the BlackRock announcement. This trend is seen across jurisdictions, with Canadian and European spot ETPs, as well as U.S. futures ETFs, experiencing robust inflows.

Block Scholes’ groundbreaking research showcases Bitcoin’s newfound independence from U.S. stock markets, opening up new possibilities for investors and market analysis.