Bitcoin is being left behind as correlation with shares widens

Bitcoin is being left behind as correlation with shares widens
Cryptocurrency selloff is at odds with gains for equities.
NOV 15, 2023
By  Bloomberg

The buy-everything wave that just swept across global markets has bypassed Bitcoin, which is down about 3% since a soft US inflation print rolled across trading screens and stirred a bout of wider risk taking.

The drop since the US data were published on Tuesday morning compares with a 2% jump in an index of global shares on bets that the Federal Reserve is done with interest-rate hikes and will pivot to cuts next year.

A 30-day correlation coefficient for Bitcoin and MSCI Inc.’s gauge of world stocks now sits at minus 0.23, the most negative since the onset of the pandemic in early 2020. A reading of 1 indicates assets are moving in lockstep, while minus-1 would show they’re moving in opposite directions. 

Ordinarily, tumbling bond yields, surging equities and expectations of a Fed reversal would be viewed as the kind of backdrop that augurs well for crypto too, given that digital tokens are emblematic of speculative zeal.

But Bitcoin had already doubled in 2023 partly on optimism that regulators will allow the first US exchange-traded funds investing directly in the token. Those gains stoked some caution about how much further Bitcoin can advance.

“Ahead of the expected ETF announcement, the market has had a good rally, and perhaps last night’s selloff was weak hands folding given a lack of continued upside progress over the past week,” said Tony Sycamore, a market analyst at IG Australia Pty.

Sycamore also said that the closer Bitcoin is to the $38,000-$40,000 level, the bigger the chance of a “‘buy-the-rumor-sell-the-fact-type’ reaction” as and when the ETFs get the green light.

Bitcoin, which hit a record high of almost $69,000 in late 2021, was trading at about $35,606 as of 2:41 p.m. in Singapore on Wednesday. Second-ranked token Ether held just below $2,000.

Latest News

SEC Says Game Service Roblox Part of ‘Active Investigation’
SEC Says Game Service Roblox Part of ‘Active Investigation’

Short sellers previously said the company was under investigation, though Roblox denied allegations.

Musk’s DOGE descends on CFPB with intention to shut it down
Musk’s DOGE descends on CFPB with intention to shut it down

The Consumer Financial Protection Bureau is in the crosshairs of the Republican group that is widely attempting to dismantle government agencies.

Advisor fighting Finra banishment loses $17.7 million dispute with old firm
Advisor fighting Finra banishment loses $17.7 million dispute with old firm

National Securities Corp. sued the advisor in 2020, alleging breach of contract and unjust enrichment.

Job numbers, inflation leaving room for Fed to hold rates
Job numbers, inflation leaving room for Fed to hold rates

Recent data support a measured pace by the Federal Reserve for the year ahead.

Private assets remain hot despite surging stock market
Private assets remain hot despite surging stock market

Financial advisors are still adding alternatives despite the surge in publicly traded stock prices

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.