Bitcoin's correlation with equities drops to a level not seen since mid-2021

Bitcoin's correlation with equities has dropped to 12%, a level not seen since mid-2021. James Butterfill, head of research at Coinshares, said he wasn't surprised by the decoupling as the two asset classes are fundamentally different. In Butterfill's view, last year's tweets grouping Bitcoin with tech stocks were naive and short-sighted. BTC's correlation with gold also rose to a two-year high in April, according to data From Coinpaprika. Butterfill believes that BTC and gold are both entering an environment where their stable supply will attract capital as the banking sector shows signs of stress, potentially causing problems for equities. If the US enters a period of stagflation, characterized by low growth and high inflation, BTC and gold may have a chance to shine.

Butterfill noted that BTC tends to trade inversely with the dollar, and that if the Federal Reserve cuts interest rates, the dollar index (DXY) will continue to slide. 

DXY has dropped nearly 10% in the last six months, according to TradingView. BTC's usage is also picking up, thanks to the advent of Ordinals, a way of storing data on the world’s most valuable blockchain. Transactions hit an all-time high on May 2, with roughly 682,000 recorded on BitInfoChart.