Bitcoin’s correlation with the Nasdaq 100 has dropped to just 3% in June, marking a significant decline from the 60% correlation observed in 2022. This decrease in correlation comes as Bitcoin continues to outperform the stock index both year-to-date and over the past year. The recent surge in Bitcoin’s price to a new yearly high was driven by news of a spot Bitcoin ETF application by global asset manager BlackRock.

According to an analysis by market data research platform Kaiko, Bitcoin’s correlation with tech stocks, particularly the Nasdaq 100, has significantly diminished in recent months. The correlation currently stands at just 3%, indicating a clear divergence in trading trajectories.

Bitcoin Outperforms Nasdaq 100

The declining correlation can be attributed to Bitcoin’s double-digit gains in June. While the Nasdaq 100 has recorded a 35% gain year-to-date, Bitcoin has outperformed with a 108% increase. Over the past year, Bitcoin’s performance has remained strong, with a growth of over 72%, despite occasional sell-offs triggered by events like the collapse of TerraUSD and FTX in 2022. The analysts at Kaiko highlight that this performance has significantly reduced the lockstep trading observed in the second half of last year, which had a 60% correlation.

Even amid negative sentiment following regulatory actions against Binance and Coinbase, Bitcoin has continued to outshine traditional risk assets. The recent market turmoil in the banking sector further highlighted Bitcoin’s resilience as stocks struggled. Additionally, news of BlackRock’s ETF filing has fueled Bitcoin’s upward momentum, leading the entire crypto market higher.

According to CoinShares’ Chief Strategy Officer Meltem Demirors, BlackRock and other financial institutions with a combined $27 trillion in client assets are actively exploring ways to provide customers access to the crypto asset class.

While the BlackRock-inspired ETF frenzy remains a significant bullish catalyst, other metrics, such as open interest, suggest growing inflows and speculation in Bitcoin. Maintaining support above the psychological level of $30,000 or bouncing back from a retest below that level could pave the way for further upside action in Bitcoin’s price. In the short term, a critical hurdle to watch is the $34,000 level.

FAQs

What is Bitcoin’s correlation with the Nasdaq 100?

In June, Bitcoin’s correlation with the Nasdaq 100 has fallen to just 3%, down from 60% in 2022.

How has Bitcoin outperformed the Nasdaq 100?

Bitcoin has outperformed the Nasdaq 100 both year-to-date and over the past year. While the Nasdaq 100 has gained 35% year-to-date, Bitcoin’s price has increased by 108%.