Bitcoin-Equities Correlation Rising, Brazil's Trading Volume Surges

By: Isha Das

Bitcoin's (BTC) correlation with equities has been noted to be on the rise, with a 90-day correlation reaching 0.17 last week after hitting a multi-year low of 0.01 in March, according to new data. This shift is potentially attributed to a sell-off of risk assets in April due to macroeconomic headwinds and geopolitical tensions. Bitcoin's correlation with risk assets remains below its 0.6 high, seen during bull markets.

In contrast, standout trading volumes have been noted in the Brazilian crypto market. Between January and early May 2024, Brazilian real (BRL) trading volume amounted to $6 billion, marking the largest Latin American crypto market. BRL trading volumes have grown 30% from the previous year, outstripping US dollar trading volumes since January. Stablecoins accounted for nearly half of all BRL trading, while BTC and ETH made up 43% of the trade volume.

Recent trends also suggest investors are anticipating volatility as the US SEC rejects or approves spot Ethereum ETFs on May 23. Furthermore, the markets are keenly awaiting the release of the US Consumer Price Index (CPI) data, which may potentially influence Bitcoin's price. A slowdown in inflation could bolster risk assets like Bitcoin.