The correlation between Bitcoin price and major tech stocks continues to increase. Former BitMEX CEO Arthur Hayes believes that Bitcoin and Ethereum prices could fall along with the prices of major tech stocks.
According to Bloomberg, the correlation between bitcoin and the biggest tech stocks keeps increasing. There has been an increasing correlation between the Bitcoin price and the Nasdaq 100 Index, especially since the beginning of the pandemic. Bloomberg reported that the 40-day correlation between Bitcoin and the Nasdaq 100 Index rose to 0.6945 on April 8, 2022. The closer the value is to 1, the greater the correlation.
Since the Bitcoin price is heavily dependent on movements in the stock markets, one has to ask the question whether the largest cryptocurrency really helps to diversify an investment portfolio. For years, BTC proponents viewed BTC as a good investment opportunity because the cryptocurrency’s price moved independently of other markets. As the number of BTC investors grew, the correlation between BTC and tech stocks seemed to increase.
Since the beginning of 2022, the narrative has been spreading that institutional investors are crucial for market developments. Cryptocurrencies are increasingly coming into the mainstream, which is why the crypto market is also increasingly adopting the behavior of traditional markets.
Former BitMEX CEO and 100x co-founder Arthur Hayes is a frequent commentator on market trends. Hayes also commented on the growing correlation between the BTC price and the Nasdaq 100 index. According to the crypto expert, if the Nasdaq index falls, the price of Bitcoin and Ethereum will fall.
Hayes said the correlation “isn’t what we want,” explaining that rising interest rates, global fiat liquidity conditions and slowing economic growth would affect big tech.
Earlier this year, Hayes said the global financial order was changing because of the sanctions against Russia. Hayes believes that a new era is dawning in which gold and bitcoin will have their say and that the two assets will benefit from this development. Hayes made a Bitcoin price prediction: If BTC becomes the world reserve asset, the BTC price could rise to over USD 1 million.