The idea that bitcoin is a worthwhile part of a diversified portfolio is fraying, with huge losses caused by the unsound trading platform
The pain spread across cryptocurrencies by the meltdown of Sam Bankman-Fried’s FTX is fracturing the link they once had with other risk assets, a sign that bitcoin’s influence on global investors may be diminishing.
Bitcoin dropped 23% last week, its worst tumble since June, and was last trading at about $15,879. The S&P 500 index soared 5.9% in the gauge’s best gain since June. The correlation between the two last week dropped to the lowest this year, based on a 20-day study. The performance gap between bitcoin and the Nasdaq has hit the widest since 2020.
The latest crypto rout came as investors were already souring on the space and as declines in price shrank the footprint of virtual currencies. The total market value of all tokens has dropped more than 70% from a record peak of just under $3-trillion set a year ago, according to the CoinGecko website.
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