Tech
Bitcoin’s Correlation With Tech Stocks Rises to Highest Level Since August
Bitcoin has been lumped together with other speculative investments During the run-up to the Federal Reserve’s latest tightening cycle, a crash on expectations of higher interest rates would have dampened risk appetite. Now, with optimism rising again that borrowing costs could soon come down, proponents of the largest cryptocurrency say it’s more akin to high-growth assets like tech stocks.
The token has been trading as such lately. The digital currency’s 90-day correlation coefficient with the tech-heavy Nasdaq 100 index hit 0.46 this week, the highest level since late August. A coefficient of 1 means the assets are moving in tandem, while minus 1 would indicate they are moving in opposite directions. After the Fed began raising its target rate on overnight lending between banks in early 2022, the correlation jumped to more than 0.8, the highest level since the digital asset exploded into mainstream consciousness.