The Bitcoin price has long shown a high degree of correlation with the traditional financial market. Now the largest cryptocurrency from the market seems to be slowly disconnecting. The moment that Bitcoin has chosen to do that is great, because stocks are currently going through a difficult period.
Fourth day of misery
The US Nasdaq lost 1 percent of its market cap yesterday and the S&P 500 and the Down Jones Industrial Average (DJIA) also lost a few percentage points. This means that the major stock markets are on the fourth loss day in a row, which is not often the case in the stock markets. The losses may be slightly smaller than those in the crypto market, but often the gains are too.
The US Nasdaq is at its lowest point in 15 months after losing 1 percent. As of the beginning of 2022, the Nasdaq has lost 33.35 percent, which is a huge amount for a major stock index. That fact makes it extra special that Bitcoin has been relatively stable in recent weeks. Usually, Bitcoin loses even more value than the stock indices when they fall.
Bonds and oil up
Unlike equities, government bonds and oil have just started to gain momentum. You now sometimes receive an interest rate of up to 4 percent on American government bonds. That makes it less attractive for traders to invest in riskier assets like Bitcoin and stocks. After all, you know for sure from the US government that they will repay their dollar loan and a guaranteed return of 4 percent is not wrong.
Certainly not at a time when many traders expect that all prices can sometimes take a hit. This also contributes to the fact that the market is currently struggling to stay afloat. Bitcoin succeeds nicely in this, by remaining relatively stable around USD 19,000, but we have not seen a real increase for a long time.