Markets
Bitcoin (BTC) Price Moves Closer to S&P 500, Nasdaq as Cryptocurrencies Fall Along with Stocks
While Bitcoin (BTC) has struggled mightily in recent months, with its price falling more than 20% since hitting a record high in mid-March, U.S. stocks – represented by the Nasdaq Composite and S&P 500 – appear to be on a one-way path higher.
Both stock indexes closed in the green for the seventh straight day on Wednesday, both hitting all-time highs. For the S&P 500, it was its 37th record close of 2024 and for the Nasdaq, its 27th. according to MarketWatch.
A report yesterday in the block noted that bitcoin’s correlations with these indicators had fallen to multi-month lows — to minus 0.84 with the Nasdaq and minus 0.82 with the S&P 500. (A reading of minus 1 would mean they are moving essentially the same amount but in opposite directions.)
That’s not the case today. They’re all moving in lockstep. But unfortunately for the bulls, that’s because stocks have fallen sharply. As of noon New York time, the Nasdaq is down 1.8% and the S&P 500 is down 0.9%. Bitcoin, which earlier in the session surpassed $59,000 welcome to us inflation newsis now down 0.6% at $57,500. CoinDesk 20 Index is down 0.4%.
Cryptocurrencies could suffer further declines if the stock market’s bad day turns into a broader correction, Joel Kruger, market strategist at LMAX Group, said in a morning update.
“Right now, the biggest risk we see for crypto assets is the risk that very overbought U.S. stocks are about to collapse,” Kruger said. “The correlation is by no means absolute, but there is evidence to suggest that a sharp pullback in stocks could weigh on crypto assets, at least for a while.”