📝 Nasdaq-Bitcoin Correlation Hits Record High: Saxo Bank

Positive correlation between the Nasdaq 100 and the price of Bitcoin hits record high. Thus, crypto investments are behaving more as regular high-risk assets, with similarity especially to tech stocks. During periods of such high correlations, cryptocurrencies are less likely to add any diversification to a portfolio to spread out risk. The sharp decline in crypto markets this year has removed some of the speculators who were riding the crypto uptrends in 2020 and 2021. Using the search activity on Google as a quantification of public interest, we find that the interest in cryptos has faded to moderate levels. Pessimists see 2022 as the beginning of a crypto winter, where lower crypto prices and reduced engagement in crypto applications will decrease hand in hand in a negative feedback loop. On the other hand, optimists hope for a positive spiral if the investment appetite in cryptos increases, driving up the price and eagerness to engage in crypto technologies. They see the bear market as an opportunity to prepare for the next bull run and as a healthy clean-up of the crypto space, which can bring back some of the stability and reliability that were lost during the first half of 2022. - Saxo Bank Quantitative Analysis