However, the cryptocurrency took a turn of the screw and rose more than 50% so far this year, trading close to US$ 25,000.
The rebound presents a particular feature: for the first time since the pandemic, there was no longer a correlation between the trends of stocks and cryptocurrencies.
A correlation in the last 40 days between Bitcoin and the S&P 500 index stood at 0.3 points, after a record of 0.8 last May, according to the Bloomberg agency: a result of 1 implies that both assets fluctuate together , while a smaller figure indicates the opposite.
Similarly, Bitcoin is also running against the dollar and Treasury assets, after showing similar behaviors. While Bitcoin has accumulated 50% gains this year, the S&P 500 is only 6%, the Nasdaq 13% and gold 1%.
The situation also extends to other cryptocurrencies: the digital asset index formulated by MarketVector – which monitors one hundred alternative currencies such as Ethereum and Tether – has risen 40% so far this year.
What is expected for the coming months
“Cryptocurrencies are decoupling from traditional assets in 2023 and increasingly industry-specific events are driving the market”the digital asset research firm Kaiko explained in a note.
For his part, Richard Galvin, co-founder of the Digital Asset Capital Management fund, stated that unless there is an “escalation in the instability of the macroeconomy”, cryptocurrencies “will once again be driven by specific market factors”.
When locating where the optimism for cryptocurrencies comes from, market analysts detected a strong buying momentum from the Asian region, driven by events such as the recent official support in Hong Kong for cryptocurrencies.
This situation contrasts with that of the United States, which found itself in a selling position due to greater regulatory pressure, after the fall of the FTX platform.
Demand was also boosted by “retail investment” given “the absence, for the moment, of institutional investors due to the FTX debacle,” JPMorgan strategist Nikolaos Panigirtzoglou said.
The market is also betting on cryptocurrencies for the next update on the Ethereum network, which will facilitate the withdrawal of coins used in the “staking” processes through which they are deposited in exchange for obtaining additional coins as rewards.
“Innovation will help cryptocurrencies to decouple from traditional markets,” said David Moreano, a researcher at CrpyoCo.
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