The biggest cryptocurrency, Bitcoin, has dropped along with Nvidia (NVDA) and other equities linked to artificial intelligence.
Michael Santoli, senior markets analyst at CNBC, pointed out that the performance of Bitcoin challenges the widely accepted narrative that it is a store of wealth, which is regularly advanced by supporters of the top cryptocurrency.
Bitcoin and AI stocks have been trading as “the next big thing” since mid-2023, according to Santoli.
According to U.Today, in April, Bitcoin’s correlation with equities turned negative, making it a good option for portfolio diversification. However, worries over stagflation that would force the US Federal Reserve to delay important rate reduction are now causing the Bitcoin and other risky assets to sell off once more. This year, the Fed could decide not to lower rates, which would be bad news for cryptocurrencies.
Is Bitcoin already in the bear market?
Following the largest monthly decrease since August 2023, Bitcoin had a significant price decline again at the beginning of May.
The flagship cryptocurrency fell to $56,637 earlier today, and it is now trading at $57,904 on key spot platforms.
Despite the excitement about Bitcoin ETFs, cryptocurrency critic Peter Schiff has stated that Bitcoin is “definitely” in a bear market. He wrote, “Turn out the lights #HOLDers, the party is over,” on the social networking platform X.
Meanwhile, Bloomberg reports that record low prices are being offered on Bitcoin ETFs. On April 30, for example, BlackRock’s IBIT ended 1.7% below its net asset value.
The biggest cryptocurrency has nevertheless increased by over 36% so far this year.
