Crypto rues Bitcoin’s decoupling from AI-fueled tech stock gains

economictimes.indiatimes.com:

Crypto fans are now paying a price for Bitcoin’s weakened correlation with technology stocks. The top digital asset posted a monthly slump in May for the first time in 2023, while the Nasdaq 100 added almost 8% amid hype over artificial intelligence. A 30-day correlation coefficient for Bitcoin and the tech-heavy Nasdaq 100 is around 0.2 versus 0.8 in May 2022. A reading of 1 indicates assets are moving in lockstep, while minus-1 would show they’re moving in opposite directions. Digital-asset investors delighted in crypto’s waning tie with shares earlier in the year when tokens were surging and leaving equities behind. The implications of the split are less favorable now.

Did you Know?

SAP has launched a new enterprise on the Metaverse with the aim of accelerating cloud adoption among Indian firms. The interactive and immersive ‘cloud on wheels’ platform will enable customers to experience the full range of SAP’s offerings and reimagine processes for improved business outcomes.

“A bit of idiosyncratic risk has finally returned to these assets as opposed to just everything is the same,” said Peter van Dooijeweert, head of multi-asset solutions at Man Group. The Nasdaq is being aided by the AI buzz, he added. Bitcoin’s rebound this year has fizzled to 64% after last month’s near 8% drop. The token slid more than 1% to $26,734 as of 10:51 a.m. in Singapore on Thursday. Smaller coins like Ether and XRP were also on the back foot. Back in the pandemic era of huge stimulus both crypto and tech stocks surged in tandem. Correlations between tokens and a variety of traditional assets have since weakened in the wake of a 2022 crash in virtual coins that ended up diminishing investor interest in the market. ‘Dynamic’