Data: The 30-day correlation between Bitcoin and European stocks fell below – 0.2, hitting a two-year low

According to reports, data shows that the 30-day correlation between Bitcoin and European stock markets has fallen below – 0.2, the lowest level in more than two years. In addition, the 30-day correlation between Bitcoin and NASDAQ has fallen to about 0.2, the second lowest level in more than a year (previously below 0.2 in November 2022).

Interpretation of this information:

The correlation between Bitcoin and European stock markets has been falling for the past 30 days, reaching its lowest level in over two years. This means that the movements in the price of Bitcoin are becoming increasingly independent of the movements in European stock markets. Similarly, the correlation between Bitcoin and NASDAQ has also fallen to its second lowest level in over a year, indicating that Bitcoin’s price is also becoming less dependent on the movements of NASDAQ.

This is a significant development for Bitcoin as it is often considered a highly volatile and speculative asset, with sharp fluctuations in its price being driven by market sentiment and speculation. The fact that its correlation with traditional stock markets and index funds is falling suggests that market forces beyond speculation are beginning to play a role in determining the price of Bitcoin.

One possible explanation for this trend could be the growing institutional interest in Bitcoin. Traditional investors are starting to see the potential value and diversification benefits of investing in Bitcoin, and this is likely to be causing its price to become more stable and less prone to wild fluctuations based on market sentiment alone. Another factor could be the increasing level of regulation and scrutiny that the cryptocurrency industry is coming under, which could be helping to reduce volatility and stabilize prices.

Overall, the falling correlation between Bitcoin and traditional stock markets is good news for investors who are looking for a diversification option that is less dependent on the ups and downs of the stock market. It also suggests that Bitcoin is becoming more of a legitimate investment option, with its price being determined by market forces rather than just market sentiment and speculation.