BTC Price Index and Live Chart – CoinDesk”>(BTC) has decoupled from Nasdaq (NDX), having moved in tandem with Wall Street’s tech-heavy equity index for most of the past four years.

According to Fairlead Strategies, the 40-day correlation of bitcoin with Nadaq is now zero. This indicates that there are no relationships between these asset classes.

A mathematical formula is used to calculate the correlation value based on BTC and the index’s price movement over time. A correlation value above-0.5 represents a moderately positive relationship where both assets are aligned, while readings above -0.70 indicate a strong relation. Negative numbers of 0.5 and lower indicate otherwise.

(Fairlead Strategies) (Fairlead Strategies) The correlation is now zero. (Fairlead Strategies) (Fairlead Strategies)

Since early 2020, the correlation between Nasdaq and bitcoin has been positive. It peaked at 0.8 in 2022 during the crypto bear market.

This latest separation can be explained by the fact the crypto market has been focusing on the launch of a bitcoin ETF in the U.S. since October. By Jan. 10, the Securities and Exchange Commission will likely decide on nearly 12 spot ETF applications. This could open doors to widespread adoption of this asset class.

Bitcoin can also be used to diversify a portfolio due to the breakdown in correlation. Fairlead Strategies believes bitcoin will remain independent of Nasdaq’s performance for some time.

In a Monday note, Fairlead analysts, led by managing partner Katie Stockton and founder Katie Stockton said that they expect correlations between bitcoin and NDX to remain low over the next few months, given events like the approval of a bitcoin spot ETF and the halving on April.

Analysts added that “risk assets also generally show lower correlations during bull markets than during bear markets.”

Sam Reynolds is the editor.