Bitcoin’s price has been a bit of a rollercoaster lately. After hitting a new all-time high, it’s settled around $105,000. While the price action has been relatively calm recently, there’s a definite boost in positive sentiment surrounding Bitcoin – a change from the first few weeks of 2025.
Bitcoin’s Growing Ties to the US Stock Market
Interestingly, Bitcoin’s price is now more closely linked to the US stock market than ever before. Data shows a record-high correlation between Bitcoin’s price and the NASDAQ index, specifically on January 25th. This isn’t just a recent thing; Bitcoin and the NASDAQ (and the S&P 500) have shown a strong connection throughout 2024, with only brief periods of separation.
What Does This Mean?
An analyst, Darkfost, suggests this growing correlation means institutional investors are increasingly viewing Bitcoin as a legitimate asset class, causing its performance to mirror traditional market trends. They believe that with a new administration potentially easing regulations, Bitcoin’s adoption by institutional investors could speed up even more.
Diversification Concerns
While Bitcoin and the US stock market offer different investment opportunities, a strong correlation between them reduces the diversification benefits for investors. Essentially, if one goes down, the other is more likely to follow.
Bitcoin’s Current Price
At the time of writing, Bitcoin is trading around $104,900, with minimal change over the past 24 hours.
