Bitcoin and the broader cryptocurrency market are experiencing a surge in value, even as traditional equities markets, particularly in the tech sector, are facing a downturn. This divergence suggests a breakdown in the correlation between the two asset classes.
The leading cryptocurrency, Bitcoin, has seen a significant increase of over 4% in the past few hours, reaching $66,377 at the time of writing, according to data from CryptoSlate. Additionally, other top tokens like Ethereum and Solana have also experienced gains, with ETH trading at $3482 and SOL at $170.
Tech Market Correlation
The crypto market has seen a notable surge coinciding with the start of New York trading, reaching new monthly highs while most equities are on a downward trend. This shift marks a departure from the typical correlation between crypto and tech stocks, which have historically moved in tandem since around 2020.
The correlation between Bitcoin and tech stocks has often been attributed to increased institutional adoption, as both asset classes are viewed through a similar lens by investors, leading to synchronized trading patterns.
Although studies have shown varying degrees of correlation between Bitcoin and tech stocks, there are still periods of divergence due to unique events impacting the crypto market, such as regulatory developments or advancements in blockchain technology.
Market Uptrend
The recent rally in Bitcoin can be attributed to several factors, including rumors that former President Donald Trump may announce plans to designate BTC as a strategic reserve asset for the US. Trump’s shift to a pro-crypto stance has garnered support from tech and crypto industry leaders, leading to renewed momentum for Bitcoin.
Meanwhile, Solana has been outperforming other top tokens, driven by increased adoption and expectations of receiving an ETF treatment. The meme frenzy surrounding Solana has also contributed to its recent rally.
Bitcoin Market Data
As of 8:23 pm UTC on Jul. 19, 2024, Bitcoin is ranked #1 by market cap, with a price increase of 5.5% over the past 24 hours. The market capitalization of Bitcoin stands at $1.32 trillion, with a 24-hour trading volume of $34.24 billion.
