Bitcoin’s Correlation to Tech Stocks is Hitting Record Levels

Bitcoin’s association with other markets is growing, as analysts note that the market’s biggest asset is seeing a growing correlation with big tech stocks. According to data from Trading View, BTC prices are seeing an increasing correlation with Tesla (TSLA).

In light of this analysis, the correlation raises questions about whether or not bitcoin is a good diversification option. Bitcoin advocates have long argued that the asset’s absence of correlation to other markets makes it a desirable investment.

However, on-chain analytics show that the absence of correlation is fading as more investors flood the market.

There has been an expanding storyline since the beginning of 2022 concerning the role of institutional investors in shaping market behavior. Because of this, cryptocurrency use has become “mainstream,” and the market has continued to mimic other established markets.

Amid requests for comments on the development, the Islamic Сoin Chief Business Officer, Mohammed Alkaff Alhashmi told Coin Edition that many investors and traders view cryptocurrency the same way they view tech stocks regarding risk and growth potential.

Mohammed Alkaff added:

I believe a large part of the crypto native community is also a tech community (be that developers, gamers, or investors), so they are, therefore, comfortable with investing in both. This might lead to some correlation between cryptocurrencies and tech stocks, especially in times of extreme “risk on” or “risk off”

Experts also agree that Decentralized science (DeSci) is an initiative to create Web3-based public infrastructure for financing, developing, evaluating, crediting, storing, and sharing scientific information equitably and transparently. Thus, blockchain initiatives encouraging technological advancement and financing will further strengthen this correlation.

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