"An intriguing shift is happening: The long-established correlation between Bitcoin, the S&P Index, and net liquidity—a key indicator of the Federal Reserve's market intervention scale—seems to be fading. But why? Despite the Fed nearly doubling its balance sheet in 2020, the U.S. financial market soared to all-time highs. Some analysts believe the Fed is no longer the main market driver, replaced by excess liquidity. But there's more...the S&P 500's performance isn't as broad-based as it appears, with a select group of tech and AI stocks leading the way. However, it's Bitcoin's decoupling from net liquidity that presents a fascinating twist..."
Bitcoin and S&P 500 decouple from net liquidity Bitcoin and S&P 500 decouple from net liquidity
Unraveling the decoupling of Bitcoin and the S&P 500 from net liquidity and its potential impact on market dynamics.
3 min read
Updated: Jul. 5, 2023 at 9:34 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.