Bitcoin: Its Temporary Correlation with High-Growth Tech Stocks
Investors should consider Bitcoin to be only temporarily correlated with high-growth tech stocks. The reason it’s moving in conjunction with the volatile tech sector is because wealthy individuals and institutional investors have entered the crypto market in recent years.
Consequently, they have lumped Bitcoin and other cryptos in with tech in responding to the recent sell-off, using the discounted cash flow (DCF) model (they don’t know anything else). Those that have sold without knowing that are going to regret it going forward.