30 Mar 2023

Correlations are declining - And it makes sense!


In Short

This article points to several forces leading correlations to naturally decline between BTC and traditional markets. In essence, no natural long-term relationship to interest rates worsened liquidity, structural changes, and behavioral patterns all contribute to the current paradigm.


  • BTC's 30 day correlation with Nasdaq sits at 0.3, down from 0.75 in October
BTC's 30-day correlation to Nasdaq currently sits at 0.30, down from 0.75 in October. Why?1. BTC was very sensitive to hikes in the short term *NOT* necessarily sensitive in the long term. 2. Smaller mcap, more risky to use in hedges 3. Liquidity 4. Tesla 5. Narrative
Interest rates/Policy effects.
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