Is $BTC decoupling from stocks?
Does it means it's the end for #crypto? Or is it an opportunity to make even more MONEY?
a 🧵
2/n
Historically, $BTC showed a low to moderate positive correlation with traditional financial markets.
But in Q1 2023, it began detaching, hinting at a shift in the financial landscape. What's the reason?
3/n
Factors behind #Bitcoin's decoupling:
- Increased institutional adoption
- A growing interest in #DeFi
- A view of Bitcoin as an inflation hedge
- Global economic uncertainties.
4/n
Decoupling could be a game-changer for investors seeking portfolio diversification.
Bitcoin or $ETH might reduce portfolio risk while maintaining or improving expected returns – a win-win.
5/n
Interestingly, Bitcoin's correlation with tech stocks – think #Nasdaq100 – has weakened.
The 30-day correlation coefficient between Bitcoin and Nasdaq 100 is around 0.2, compared to 0.8 in May 2022.
That's a HUGE difference !
6/n
The decoupling is less attractive for digital-asset investors, as it increases idiosyncratic risk.
But in the long run, it could still prove beneficial by separating us from the Nasdaq and big tech stocks.
Would you rather die than diversify? 💀
7/n
There's a chance that AI hype will further divide #crypto and tech shares, enabling the Nasdaq to outperform key cryptocurrencies.
However, we know markets are unpredictable, so that time will tell…
8/n
Want more?
Make sure to follow me on Twitter and TG!
@Overdose_AI
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This is just my perspective, so always do your own research and make well-informed decisions.
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