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Bitcoin Breaks Correlation With S&P 500
Bitcoin has been rising as U.S. markets, including the S&P 500, have been falling. Bitcoin has been highly correlated to major U.S. indices. Some have speculated that spot Bitcoin ETFs could further strengthen the current correlation.
However, the correlation was broken as Bitcoin soared while the S&P 500 was hammered.
source: commercial view
Wednesday, Bloomberg It has been reported that the current US administration is considering a Foreign Direct Product Rule (FDPR) to control chip equipment exports to China.
Donald Trump’s statements that Taiwan should pay the United States for protection also caused a stir in financial markets.
CrowdStrike, a leading cybersecurity company, released an update that triggered a global outage for its customers. Banks, airlines, and even hospitals were affected.
Bitcoin, on the other hand, has benefited from a significant inflow of capital from ETFs, as evidenced by the supply of Bitcoin backing ETFs:
source: dune
Trump’s remarks (once again) about the possibility of using Bitcoin as a strategic reserve for the United States also contributed to the rise of BTC. The US government holds approximately 213,000 BTC.
The above circumstances have created the right conditions for Bitcoin to break its shackles on traditional financial markets.
If bitcoin continues to rally while U.S. markets fall, investors may view it as a new safe haven asset. Being a new safe haven asset could mean moderate gains for bitcoin.
Will Ethereum enjoy the same status as Bitcoin?
Once the Approved ETH spot ETFs are listed on the exchange, the inflows will be closely monitored and compared to BTC inflows. While high inflows may impact the price of ETH, it is not yet certain whether it can achieve the same status as Bitcoin.
However, for the moment, Meme Coins are enjoying the biggest gains. While Bitcoin has been advancing, SOL and ETH have also been advancing.
BONK gained about 20%, while Turbo gained about 25%. Aptos and Solana (L1) also gained, although they are not related to BTC. This shows that a Bitcoin rally can be enough to “push” crypto markets higher.
All eyes will be on Ethereum next week and whether BTC’s “de-peg” from the S&P 500 is sustainable.