Bitcoin is on track for its third consecutive month of positive gains as investors continue to see it as a hedge against the recent bank failures.

Whats more interesting is that its no longer trading in lockstep with the S&P 500. In fact, data from Coin Metrics suggests the correlation between Bitcoin and equities is now the weakest since September 2021.

That makes sense, of course, considering its valuation is not coupled with earnings growth as in the case of equities. According to Alex Thorn of Galaxy Digital:

The correlation data shows that, at least recently, Bitcoin has indeed performed more like a safe-haven asset than a risk asset.

Bitcoin is currently up about 70% for the year.

On the flip side, the banking crisis has helped Bitcoin reestablished the correlation it once shared with gold. That also signals its now regaining the status as a risk-off asset. Thorn added:

Given the nature of current crisis in which fractional reserve banking systems core limitations are tested Bitcoins fundamental characteristics genuinely distinguish and offer a safe port in a storm.

Remember that the worlds largest cryptocurrency had a difficult 2022 partly because of the aggressive rate hikes. Now that were near the end of that cycle, though, its likely that Bitcoin will have a clearer path ahead for upside.

Last week, Fed Chair Powell signalled only one more rate hikes this year.

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Is Bitcoin regaining its status as a safe-haven asset? - CoinJournal