Crypto’s Correlation to Equities Dips Following All-time Highs in May

06/29 19:01

In May, the correlation coefficient between bitcoin and the tech-heavy Nasdaq broke 0.8 for the first time — bitcoin’s correlation to the S&P 500 also hit similar levels in early May. In June, the correlation between bitcoin and the S&P 500 fell to around 0.5, according to data from Coin Metrics. A coefficient of 1 means the assets are moving in tandem, while a -1 signals the opposite. Ether, which for the past six months has traded almost as one with bitcoin with a correlation coefficient of 0.9, has experienced the same trend. In May, the correlation coefficient between ether and the S&P 500 broke 0.7 before falling to around 0.60 in June, according to data from Coin Metrics. “This divergence was spurred by a wave of dramatic collapses of some of the industry’s largest firms, causing crypto prices to tank far faster than equities,” Medalie said.
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