Bitcoin price has crashed by about $6,000 from its highest point this year.
Nasdaq has moved into a strong bull market because of AI.
The Federal Reserve will conclude its two-day meeting on Wednesday.
Nasdaq 100 and Bitcoin prices have moved in the opposite direction in the past few weeks. The tech-heavy Nasdaq 100 index has soared to the highest level since April last year. In all, it has jumped by almost 40% from the lowest level this year.&
Bitcoin price, on the other hand, has been stuck at the important support level at $25,200. It has dropped by more than $6,000 from its highest level this year. In the past, Nasdaq 100 and Bitcoin had a close correlation because they are often seen as high-risk assets.
Regulatory concerns
The main reason why the Nasdaq 100 and Bitcoin price correlation has faded is the ongoing crackdown in the United States. On Monday last week, the Securities and Exchange Commission (SEC) filed a major lawsuit against Binance, the biggest company in the industry.
The agency accused the company of deceptive practices, commingling funds, and offering its services in the United States illegally. Then on Tuesday, the SEC filed a lawsuit against Coinbase, the biggest company in the US. It accused Coinbase of listing unregistered securities to American customers.
The regulatory crackdown comes at a time when the crypto industry has gone through a challenging period. Last November, FTX, a major crypto exchange filed for bankruptcy, costing invetors billions of dollars.&
Crypto companies argue that the SEC and other policymakers have not issued clear guidance about the crypto industry. For example, Coinbase questioned why the SEC allowed it to go public if it offered illegal products.
Why Nasdaq 100 index is soaring
On the other hand, the Nasdaq 100 index is soaring because of FOMO and the ongoing artificial intelligence hype. A closer look at the top movers in the Nasdaq 100 index shows that they have a thing to do with AI.
Nvidia share price has jumped by more than 180% this year, giving it a market cap of over $1 trillion. Tesla, which is also investing in AI, has soared by over 110% while Broadcom, Amazon, and Palo Alto Networks have risen by more than 70%.
Therefore, there is a likelihood that investors are rotating from the high-risk crypto industry to invest in stocks. Stocks are widely seen as being less risky than cryptocurrencies.&
Still, there is a likelihood that& cryptocurrencies will bounce back later this month as the regulatory concerns ease. As we have seen in the past, these cases tend to take years to conclude.&
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The post Here’s why the Nasdaq 100 and Bitcoin correlation has faded appeared first on CoinJournal.
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