The Nasdaq 100 Index, a leading indicator of the technology sector, has witnessed a surge of over 40% this year, fueled by the burgeoning excitement surrounding artificial intelligence. This rally seems to have reignited Bitcoin's correlation with technology stocks, which had faltered earlier in the year.
On Thursday, Bitcoin continued its upward trend for the third consecutive day, appreciating by up to 2.2% to reach $26,692. The Nasdaq 100 also saw an uptick of 0.8%. This synchronous movement between Bitcoin and tech stocks reflects a revival of their correlation that had broken down in June.
According to Bloomberg's research lead of crypto analytics firm CCData, Josh de Vos, Bitcoin tends to overreact to news events. "In the absence of that, I would expect it to correlate more with stocks," said de Vos. He further added that he anticipates this correlation to strengthen in the coming months.
The 30-day correlation coefficient for Bitcoin and the Nasdaq 100 has rebounded to nearly 0.4 from a negative 0.1 in June and July. A coefficient of 1 would indicate that the assets are moving in perfect sync, whereas a negative coefficient would suggest they're moving in opposite directions.
In another development reported by Bloomberg's crypto analyst Jamie Coutts, Bitcoin's clean energy usage for mining operations has surpassed the critical 50% threshold. This data is based on recent findings from the Cambridge Center for Alternative Finance, which revised its estimates of Bitcoin mining power consumption downward due to increased usage of sustainable energy sources and reduced reliance on fossil fuels.
Since China’s mining ban in mid-2021, emissions associated with Bitcoin have dropped by 37.5%, mitigating some environmental concerns related to the cryptocurrency. This shift towards sustainability aligns with Tesla (NASDAQ:TSLA) CEO Elon Musk's statement in June 2021, where he indicated that Tesla would resume accepting Bitcoin payments once the cryptocurrency's mining operations became more environmentally friendly.
These developments underscore the evolving landscape of digital currencies and their increasing integration into the broader financial ecosystem.
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