1 week ago
Since the November 5 predetermination of Donald Trump to the U.S. presidency, bitcoin (BTC) is up astir 47%, sharply outperforming the S&P 500's 4% advance.
The incoming president, of course, has made wide his friendliness towards bitcoin and crypto. Also worthy information is the Republican expanse of the Senate and House of Representatives, wherever laws that mightiness impact crypto volition yet beryllium passed.
Andre Dragosch, Head of Research astatine Bitwise successful Europe, spoke exclusively with CoinDesk astir different factors affecting the divergence betwixt bitcoin and stocks.
"My presumption connected bitcoin versus S&P 500 is that the banal marketplace has been negatively affected by the Fed's hawkish complaint chopped successful December," said Dragosch. "The Fed revised its planned complaint cuts for 2025 to 2 complaint cuts only, little than antecedently telegraphed and besides little than antecedently anticipated by accepted fiscal markets".
At the aforesaid time, the DXY index, which measures the worth of the U.S. dollar against a handbasket of the large currencies, is up 5%, putting further unit connected hazard assets. That mightiness typically see a wounded connected bitcoin, but Dragosch explains that it held up comparatively good acknowledgment to different factors, the ongoing bitcoin proviso shortage connected exchanges being among them. "Bitcoin speech balances person continued to drift little contempt profit-taking," helium continued.
Of precocious though, bitcoin and the S&P 500 person again begun moving intimately together, their correlation hitting 0.88 (with 0 being nary correlation and 1 statesman implicit correlation) implicit the astir caller 20-day moving average.
"While on-chain factors volition apt supply a important tailwind astatine slightest until mid-2025, the deterioration successful the macro representation could airs short-term risks for bitcoin arsenic well, particularly connected relationship of the inactive comparatively precocious correlation with the S&P 500," Dragosch concluded.
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