Bitcoin’s price has risen notably, breaking its traditional correlation with tech stocks. Recent data shows increased ETF inflows, highlighting growing investor confidence. Analysts stress the importance of Bitcoin securing short-term wins to establish itself as a credible asset, especially as investor sentiment improves.
The price of Bitcoin experienced significant growth this past week, jumping from $84,100 on Monday to $93,549, marking an increase of 6.5% within a 24-hour period. Analysts have noted this rise as Bitcoin appears to be breaking free from its historical correlation with technology stocks.
Eric Balchunas, a Senior ETF Analyst at Bloomberg, highlighted Bitcoin’s superior performance compared to treasury bonds, which he described as “unreliable” under current market conditions. Meanwhile, gold has shown varying results, recently dropping slightly after reaching nearly $3,500 per ounce. Balchunas suggested that Bitcoin must secure “short-term wins” to stand as a credible alternative asset comparable to gold.
Matthew Sigel from VanEck reported that Bitcoin’s increase from its April 7 low suggests a decoupling from US tech stocks, evidenced by Exchange-Traded Funds (ETFs) recording their largest inflows since January 30. These inflows are crucial for sustaining Bitcoin’s price rally; without continued investment, the upward momentum may be jeopardised.
Recent data underscores a rare divergence between Bitcoin and the NASDAQ index: while Bitcoin surged, the NASDAQ faced declines. Historically, a drop in the NASDAQ’s 200-day moving average has posed challenges for Bitcoin; however, some analysts are optimistic that current investment flows might yield different outcomes this time.
Investor sentiment towards digital assets is reportedly improving. Notably, most new capital entering the crypto market within the past week has been directed towards Bitcoin, despite a mid-week retail wave resulting in $146 million in outflows. The recent fluctuations in Bitcoin’s price suggest it may be establishing itself as a viable investment asset amidst shifting market dynamics.
