Clara Medalie: Bitcoin and Nasdaq’s correlation is at its lowest since FTX collapse

Clara Medalie, director of analysis at digital property knowledge supplier Kaiko, says Bitcoin (BTC/USD) is presently exhibiting the least correlation with Nasdaq.

Medalie shared her market outlook throughout an interview with CNBC, the place she highlighted Bitcoin’s newest rally within the aftermath of main shockwaves within the banking sector as crypto-friendly banks Silvergate Financial institution, Silicon Valley Financial institution (SVB) and Signature Financial institution collapsed.

Bitcoin’s breaks lockstep correlation with Nasdaq

Bitcoin value motion in 2022 was largely in tandem with shares, with downward stress catalysed by rising rates of interest seeing BTC and Nasdaq extremely correlated.

Earlier this yr, when cryptocurrencies bounced greater amid a bear market rally, they did so alongside an upbeat inventory market helped by a resurgent tech sector and anticipation that the Federal Reserve would begin winding down on its rates of interest hikes.

Whereas cryptocurrencies proceed to react to Fed’s financial insurance policies, the previous month reveals Bitcoin and Nasdaq haven’t been so carefully linked in 2023.

In response to Medalie, the present correlation between Bitcoin and the US inventory index is at its lowest degree because the massacre that adopted the collapse of crypto trade FTX in November.

“Bitcoin’s correlation with Nasdaq at the moment is at its lowest degree because the FTX collapse. With FTX, that was a fairly idiosyncratic market occasion and so it solely briefly dipped. However plainly truly because the begin of the yr we’ve seen a gentle decline on this.”

The decoupling is simply not with Bitcoin, but in addition with the whole asset class in opposition to equities, she famous, including that cryptocurrencies suffered negativity in January and February. Up to now week, the slight decorrelation has come as markets shake off the bearish sentiment, significantly from the standpoint of what was largely a regulatory crackdown within the US.

The bounce for main stablecoin USD Coin (USDC) and Binance’s announcement that it will convert 1 billion Binance USD (BUSD) into Bitcoin, Ether and BNB have been constructive value triggers, she added.

A take a look at the markets reveals Bitcoin is presently holding close to $25,000, down 4.5% previously 24 hours. Nonetheless, BTC value is up by 14% previously month after a breakout to highs of $26,500 on Tuesday.

Compared, the Nasdaq can also be buying and selling decrease, roughly 1% down on the day and round -6% over the previous 30 days. Yr-to-date, Nasdaq is up 8.6% as of 10:30 am ET on Tuesday, whereas Bitcoin value has gained greater than 56% in that point.