The leading cryptocurrency, , has enjoyed a 15% rise over the past week. Conversely, traditional markets in the S&P 500 and the Nasdaq have not fared nearly as well.
The split in price performance has also led several crypto enthusiasts to revisit the narrative that the orange coin is the best safe-haven asset in the world. That's because these assets cannot be seized, censored, or inflated by governments and private enterprises, making them particularly attractive in times of conflict.
Data from CoinMetrics now suggest that this trend may very well have legs.
When comparing the S&P 500 and Bitcoin, the two hit their highest correlation on February 22 before taking a steep tumble through the week.
The correlation is measured from -1 to 1, with a high negative score indicating a very low correlation. A high positive score suggests the opposite.
Last Tuesday, the correlation between the two was 0.546, its highest ever. Today, that figure has plummeted to 0.461, marking a 15.56% drop.
Across different metrics, a similar narrative appears.
Over the past month, the S&P 500 has dropped more than 6%, while the NASDAQ has performed just as poorly over the same period.
Bitcoin and have both risen roughly 18% during that same period.
Looking closely at specific crypto stocks like Block (formerly Square), , and also reveals an interesting portrait of where investors are moving. In the last 30 days, Block (SQ) is up a whopping 10.5%, Coinbase (COIN) is up 4.7%, but PayPal (PYPL) is down nearly 20%.
The fact that Block and Coinbase are performing as well as cryptocurrencies like Bitcoin suggests that the market views them similarly. PayPal, however, appears to be firmly locked into the traditional finance category despite the company's moves in the crypto space.
However, more time is needed before a full dislocation can be confirmed (and celebrated).
Still, the data suggest an interesting trend is afoot.
Previously, when the Federal Reserve indicated that they would begin raising rates back in November, all financial markets, including crypto, took a big hit. On Black Thursday in March 2020, when the extent of the pandemic became clearer, both markets also fell simultaneously.
Now, though, the asset class may be showing its true potential.
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.