Bitcoin holds near $42,000 as rally weathers retreat in equities
Bitcoin shrugged off a slide in global markets during a rally to a more than 19-month high, a sign of its decoupling from other assets.
The token jumped 5.8% to scale $42,000 on Monday and was just below that level in morning Asian trading on Tuesday. In contrast, gauges of global shares and bonds are nursing losses since the start of the week.
“This divergence underscores the current low correlation of crypto with other traditional macro assets,” Sean Farrell, the head of digital-asset strategy at Fundstrat Global Advisors LLC, wrote in a note.
Bitcoin’s correlations with the likes stocks and gold have ebbed in 2023 as crypto-specific factors helped to spur a 152% climb in the largest digital asset. A key driver of the gains is the expectation that the US will allow its first spot Bitcoin exchange-traded funds, potentially widening demand for the token.
Did you Know?
As a beginner to cryptocurrency investing, you should consider two critical things. First, you should determine and understand your risk tolerance, as cryptocurrencies can be volatile. Only invest what you can afford to lose. Secondly, don’t put all your funds in one cryptocurrency; diversify to mitigate risks. Deciding where to invest your hard-earned money can be difficult.
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A 90-day correlation coefficient for Bitcoin and MSCI Inc.’s index of world shares has dropped to 0.18 from 0.60 at the start of the year. A similar study for the token and spot gold shows the figure has declined to about nil from 0.36. A reading of 1 indicates assets are moving in lockstep, while minus-1 would show they’re moving in opposite directions.
US Outlook
Another industry-specific driver is regulation. Crypto executives are increasingly hopeful that the
