The euphoria around what’s now expected to be regulatory approval of a spot bitcoin exchange-traded fund (ETF) listing helped aid the crypto’s surge of nearly 20% in the past week.
Bitcoin’s (BTC) move higher came as technology stocks continued their decline despite a number of mega-cap names – Amazon, Google and Facebook among them – reporting better-than-hoped earnings results. The Nasdaq Composite is now lower by more than 10% from its July high, putting the tech-heavy index in correction territory.
This is notable as bitcoin in the past has shown a strong correlation with U.S. equity markets, but now appears to be decoupling. The largest cryptocurrency is currently posting more than a 100% gain year-to-date, with options activity reaching historic highs.
Bitcoin’s market capitalization of about $670 billion is now roughly on par with Elon Musk’s electric carmaker Tesla (TSLA) and tops that of pharmaceutical giant Eli Lilly (LLY).
Were it a U.S.-listed stock, bitcoin would rank as the ninth-largest by market cap, just behind that of Berkshire Hathaway, the conglomerate run by Warren Buffett, data from CompaniesMarketCap shows.
Traders have mixed opinions ahead of FOMC
Meanwhile, traders remain cautious about an extended price surge in the weeks ahead, pointing to the U.S. Federal Reserve’s Federal Open Market Committee (FOMC) meeting scheduled for next Tuesday and Wednesday.
“The market’s atmosphere could drastically change,” analysts at Japanese exchange Bitbank shared in a note with CoinDesk. “Recent economic data have demonstrated the U.S. economy’s strength, so a likely scenario is that the Fed will keep its policy rate unchanged but chair Powell will try to counter market’s expectation that rate hikes are over at his press conference.”
“This is why bitcoin’s potential significant upside risk has a short expiration date: it could print another leg up in the next couple of days and then enter a correction phase, or it could stay at the current level until next week’s FOMC and then start to pull back,” continued the analysts, led by Yukari Kusu.
FxPro market analyst Alex Kuptsikevich, however, gave a differing view of FOMC expectations in a Friday note to CoinDesk.
“The crypto market is holding its total capitalization above $1.27 trillion despite a frightening sell-off in equities overnight,” Kuptsikevich said. “Bitcoin and other major altcoins are once again attempting to play the role of safe haven.”
“There is also possible speculation that market turbulence in the week leading up to the FOMC meeting will force the regulator to soften its tone significantly, which is positive for crypto unaffected by the falling revenues from Google’s cloud business or similar stories,” he continued.