Is the Stock Market and Crypto Market More Intertwined Than Usual?
The relationship between the US stock market and cryptocurrencies has seen some significant changes in recent years, especially since COVID-19 hit the world. Historically, Bitcoin and crypto were sometimes negatively correlated with traditional equities, which provided a diversifying factor for investors. However, this trend has changed drastically, with Bitcoin showing an increasing tendency to act as a risk asset, aligned with major US stock indices, particularly during market turmoil.
Why Does This Matter?
This correlation presents a double-edged sword for the crypto market. When the stock market thrives, it tends to foster confidence among investors, leading to more capital flowing into cryptocurrencies. In contrast, if the stock…
