The deep correlation between the Nasdaq 100 index and Bitcoin has been talked about for years. Nasdaq, which we know as the face of the US stock markets representing new economies and new technologies, was even considered as the stock market index of BTC, as cryptocurrencies always move in the same direction during bull and bear periods. But in recent days, some statistics have emerged that could shake the love of Nasdaq and BTC. So it’s like a black cat came between the two lovers: This black cat’s name is artificial intelligence.
Bitcoin price has dropped nearly $6,000 from its highest point this year. But on the other hand, the Nasdaq entered a strong bull market due to artificial intelligence. Nasdaq 100 and Bitcoin prices have moved in opposite directions over the past few weeks. The tech-heavy Nasdaq 100 index rose to its highest level since April last year. In this period, it recorded an increase of about 40% from the lowest level of the year.
On the other hand, Bitcoin price is stuck around $25,200, which is the most important support level this year. It has dropped more than $6,000 from its high this year.
So what are the other reasons that weaken this relationship?
Regulatory concerns
The main reason for the weakening of the correlation between the Nasdaq 100 and Bitcoin prices is the ongoing regulations in the US. On Monday last week, the SEC filed a major lawsuit against Binance, the largest company in the industry. The SEC has accused Binance of deceptive practices, pooling funds and offering its services illegally in the United States. Then on Tuesday, the SEC also filed a lawsuit against Coinbase, the largest company in the United States. Coinbase was accused of listing unregistered securities to American customers.
Regulatory pressures come at a time when the crypto industry is going through a tough time. Last November, FTX, a major crypto exchange, filed for bankruptcy, costing investors billions of dollars.
Crypto companies argue that the SEC and other policymakers do not provide clear guidance on the crypto industry. For example, Coinbase questioned why the SEC allowed it to go public because it offered illegal products.
Why is the Nasdaq 100 rising?
On the other hand, the Nasdaq 100 index is on the rise due to FOMO and continued AI hype. Looking closely at the most important movements in the Nasdaq 100 index, it seems to have something to do with artificial intelligence.
Nvidia’s share price has risen more than 180% this year to a market cap of over $1 trillion. Tesla, which also invests in artificial intelligence, gained more than 110%, while Broadcom, Amazon and Palo Alto Networks increased more than 70%.
Therefore, it is thought that there is an effect as investors turn to stocks from the high-risk crypto sector. Still, it is noted that cryptos are likely to recover later this month as regulatory concerns ease. As we have seen in the past, such cases can often take years.
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