Bitcoin’s correlation with technology stocks has turned negative, according to data provided by Barchart. This deviation is notable, as it is the first occurrence since the early days of 2020.
Tale of two markets
Historically, Bitcoin and tech stocks have often moved in sync, reflecting investor sentiment toward risk and innovation.
This correlation has been particularly observed during times of market optimism. The appetite for both high-growth technology stocks and cryptocurrencies seemed to rise and fall together.
The underlying reason behind this parallel movement can be largely attributed to the profile of investors into both markets, often overlapping demographics seeking growth and being comfortable with digital assets.
Furthermore, both markets have been sensitive to similar economic indicators and monetary policies. Tech stocks and Bitcoin frequently respond in unison to Federal Reserve announcements and interest rate changes.
Tech stocks’ stellar trajectory
Meanwhile, the Nasdaq 100 is set to close the year with record performance, which of reminiscent of the dot-com bubble’s peak, per Bloomberg’s report.
The tech-heavy index is charting its best year since 1999. It has been propelled by a surge in artificial intelligence enthusiasm and investor speculation on more dovish stances from the Federal Reserve.
This rally in tech stocks reflects broader market optimism, with the S&P 500 also nearing an all-time high.
The anticipation of economic growth and the potential for lower interest rates in 2024 have played a significant role in this uptrend.