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‘Bitcoin is melting.’ Here’s what a 30% drop from highs in the crypto may say about stock-market risk sentiment

·3 min read
‘Bitcoin is melting.’ Here’s what a 30% drop from highs in the crypto may say about stock-market risk sentiment
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What does a weekend meltdown in bitcoin prices portend for U.S. stocks? Bitcoin (BTCUSD) is supposed to be an asset that isn’t highly correlated with equity markets, or any other traditional asset for that matter, but some analysts have pointed out that the cryptocurrency has traded in closer step with parts of the market amid the recent turbulence in equities as investors attempt to assess the most effective strategies for playing an economy recovering from the worst pandemic in more than a century. In a blog post on Sunday, Mott Capital’s Michael Kramer said that bitcoin’s recent breakdown could signal that risk appetite on Wall Street is in transition — presumably in a bearish direction.