Bitcoin’s shifting relationship with traditional markets indicates that investors may once again view it as a safe-haven asset, according to research from Bank of America.
The correlation of the cryptocurrency market with gold has risen from zero to 0.5 since mid-August, Bloomberg first reported, citing BoA digital asset strategists Alkesh Shah and Andrew Moss.
Its correlation with the majors also fell below all-time highs, with the S&P 500 recording 0.69 and the Nasdaq hitting 0.72.
Investors may view bitcoin as a “relative safe haven” amid macroeconomic uncertainty, Moss and Shah wrote, adding that “it remains to be seen if the market will bottom out. »
The new data points to a change in the trend of cryptocurrencies to move in step with the stock markets.
Bitcoin is trading at around $19,200 at the time of writing, up 1.2% over the past 24 hours, according to data from Coinbase. Still the number one cryptocurrency by market cap, it is now 72.1% below its all-time high of $68,789.
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Lucy is the editor for NFTs, games, and the metaverse at ZoneSofia. Prior to joining ZoneSofia, she worked as a freelancer, signing contracts with Wired, Newsweek, the Wall Street Journal and other publications.