JPMorgan Identifies Strong Correlation Between Bitcoin and Russell 2000 Index
JPMorgan analysts indicate a high correlation between Bitcoin and small-cap tech stocks in the Russell 2000 Index, based on recent data. The Russell 2000 tracks the smallest 2,000 stocks in the US market, primarily growth-oriented companies.
Key Points
- Both crypto and equity markets have maintained a correlation, with Bitcoin showing the highest linkage to altcoins.
- This correlation arises from digital currencies' reliance on venture capital and smaller tech firms focusing on blockchain innovations.
- The correlation has been structurally positive since 2020, particularly during major shifts in the tech sector.
- Fluctuations in correlation occur, peaking during significant tech performance changes.
- Recent market movements saw Bitcoin rebound to $105,038.21, a 2.6% increase in 24 hours.
- The total crypto market cap reached $3.5 trillion after the Federal Market Open Committee meeting, maintaining interest rates at 4.25-4.5%.
- Price targets for Bitcoin are set at $112,375 and $116,085, supported by rising institutional interest.
Analysts suggest ongoing discussions about strategic Bitcoin reserves among corporate firms may lead to further price increases.