Bitcoin’s Correlation with Federal Reserve Policy Shifts Post-ETF Approval
- Bitcoin’s correlation with the Global Easing Breadth Index has turned strongly negative since early 2024.
- Spot bitcoin ETFs were approved by the U.S. SEC in January, marking a significant shift in market dynamics.
- Previously, bitcoin followed global easing cycles positively, but the new report indicates this relationship has reversed and is now nearly three times stronger.
- The change reflects a transition from retail to institutional investors driving price movements in the cryptocurrency market.
- Current market conditions are influenced by stagflation fears amid rising oil prices and geopolitical tensions.
As bitcoin evolves into a leading indicator rather than a lagging one, institutional flows and policy progress may become more significant than traditional monetary easing signals.
The report highlights that bitcoin’s response to monetary policy changes may now be ahead of traditional expectations, reflecting its new role as a forward-looking asset.(Source)
