The correlation between Bitcoin and the Nasdaq index keeps breaking historical highs in the Fed’s rate hike cycle due to several factors. Tightening liquidity pressures risk assets, with Nasdaq’s tech stocks and Bitcoin both swayed by market sentiment. Institutional entry via Bitcoin ETFs strengthens ties to traditional markets, with correlation reaching 70% in March 2025. Moreover, rate hikes spark concerns over growth and profits, syncing high-valuation tech stocks with speculative Bitcoin. Yet, Bitcoin’s fixed supply and unique traits differ from Nasdaq’s fundamentals, suggesting this high correlation may be short-term. Long-term divergence could emerge due to halving or regulatory shifts.
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