“Wall Street arrives for Bitcoin.”
This sentence used to trigger hope and fear through the circles of cryptography. Today, it is no longer a future threat or an optimistic promise – it’s just reality.
Bitcoin’s original premise (or crypto in general)– an asset which is resistant to censorship and does not respond to any financial institution or traditional government – is in the process of vanishing as Wall Street giants (as well as powerful political figures) Continue to establish their solid foot in the space of digital assets.
During the first years of the Digital Asset Revolution, Bitcoin was celebrated as not correlated and anti-settlement without being accompanied. The tradfi asset classes like S&P 500 would increase and drop – Bitcoin does not care.
What was cared for bitcoin is the faults of the traditional financial system, which are still there to date.
A major example of the history of the BTC which no longer spoke is the banking crisis of Cyprus 2013.
The crisis, which occurred due to the overexposure of banks to local real estate companies and in the midst of the European debt crisis, has seen deposits greater than 100,000 euros obtaining a substantial haircut.
In fact, 47.5% of unused deposits were seized. Bitcoin’s response was to move strongly towards, for the first time in its history, to cross the threshold of $ 1,000.
After a prolonged bear market on the collapse of MT. Gox, the idea of mass adoption increased, the entry of Wall Street in the sector considered as a validation cachet for Bitcoin because this meant more liquidity, mass adoption and price maturity.
It has changed everything.
The price could have matured, as evidenced by the decrease in volatility. But let’s face it-Bitcoin is only an other macro-axé risk asset.
“Bitcoin, formerly celebrated for its weak correlation with traditional financial assets, has increasingly shown sensitivity to the same variables which lead the stock markets on short deadlines,” said Nydic Research in a report.
In fact, the correlation now oscillates near the upper end of the historic beach, according to NYDIG calculations. “Bitcoin correlation with American actions remained high until the end of the quarter, ending at 0.48, a level near the upper end of its historic range.”
In other words, when there is blood in the street (Wall Street that is)Bitcoin is also bleeding. When Wall Street sneezes, Bitcoin grabs a cold.
Even Bitcoin’s “Digital Gold” nickname is under pressure.
Nydig notes that Bitcoin correlation with physical gold and the US dollar is close to zero. So much for the argument of “coverage” – at least for the moment.
Active at risk
So why change?
The answer is simple: for Wall Street, Bitcoin is only another risk asset, not digital gold, which is synonymous with “refuge”.
Investors are making every effort, rabbit from the central bank policy to geopolitical tension – the digital assets included.
“This persistent correlation force with American actions can be widely attributed to a series of macroeconomic and geopolitical developments, the pricing agitation and the growing number of world conflicts, which has considerably influenced the feeling of investors and the repair of assets between the markets,” said Nydig.
And I like it or not, this is there to stay – at least for a short in the medium term.
As long as the Central Bank policy, the macro and the red titles linked to the war reach the band, Bitcoin will probably move in tandem with actions.
“The current correlation regime can persist as long as the feeling of global risks, central bank policy and geopolitical flash points remain dominant market accounts,” said the Nydig report.
For the maxis and long -term holders, the original vision has not changed. The limited supply of Bitcoin, accessless access and decentralized nature remain intact. Do not expect them to have an impact on price action.
For the moment, the market considers Bitcoin as another stock of stock. Simply balance your commercial strategies accordingly.
