Bitcoin (BTC)-Stock Synchronization Deepens… "A Signal of Dollar Aversion, Not Risk Appetite"
Summary
- "It was reported that the correlation between Bitcoin (BTC) and U.S. stocks has recently increased again."
- "This indicates that investors are choosing scarce assets such as Bitcoin as a hedge against the decline in the dollar's value."
- "The concurrent rise of Bitcoin and stocks should be interpreted as a warning about the instability of the dollar system, not just risk asset preference."
On the 25th (local time), according to cryptocurrency-focused media outlet Cointelegraph, the recent rise in correlation between Bitcoin (BTC) and U.S. stocks is driven mainly by weakening trust in the dollar system, rather than increased risk appetite among investors.
The outlet reported, "The 30-day correlation coefficient between Bitcoin and the S&P 500 exceeded 0.4 last month, marking the highest level since 2020." It continued, "During the same period, the U.S. Dollar Index (DXY) hit its lowest point in 12 months, while Bitcoin rose 9% and the S&P 500 gained 6% respectively."
It further explained, "This signals that as the dollar's value wavers, investors are transferring funds into scarce assets like Bitcoin," and added, "The ongoing trend of de-dollarization led by BRICS, the ramped-up gold purchases by central banks, and actions by sovereign wealth funds considering Bitcoin all support this movement."
Additionally, the outlet stated, "Ultimately, the rally in both Bitcoin and stocks should be interpreted not as simple risk asset preference, but as a warning sign of fundamental instability in the dollar system."
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
