Tech
Bitcoin’s correlation with tech stocks rises to its highest level since August
Bitcoin was lumped together with others speculative investments During the run-up to the Federal Reserve’s latest tightening cycle, giving in to expectations of higher interest rates would have dampened risk appetite. Now as optimism grows again that funding costs could soon fall, supporters of the largest cryptocurrency say it is more like high-growth assets such as shares of technology companies.
The token has been trading as such lately. The 90-day correlation coefficient of the digital currency and the tech-heavy Nasdaq 100 index reached 0.46 this week, the highest level since late August. A coefficient of 1 indicates that the assets are moving in lockstep, while minus 1 would indicate that they are moving in opposite directions. After the Fed began raising the target rate on overnight loans between banks in early 2022, the correlation jumped to above 0.8, the highest level since digital assets burst into mainstream consciousness.