"Why is the split between crypto markets and stock markets unusual? While Bitcoin is known for its volatility, historically, the digital currency and stocks have traditionally risen and fallen together. So, why has there been a crypto sell off? What is contributing to the drop in investor confidence? Some of what boosted confidence in the coin was the Trump administration's early embrace of crypto, ushering in crypto-friendly regulations."
"However, as Fast Company has previously reported, a few different micro and macroeconomic factors have started to spook investors, who are pulling back from the more volatile digital currency. These factors include higher inflation; shifting interest rates; a dampening enthusiasm for AI-related stocks over fears of an AI bubble; and growing concerns over the widening gap between low-income and wealthy Americans, in what is shaping up to be a " K-shaped economy.""
Stock markets have experienced record gains while Bitcoin and other cryptocurrencies have declined, representing a rare split between the two asset classes since 2014. Bitcoin traded down over 4% at $88,945, well below its record high above $125,000 but above a low near $85,000 (almost 30% below the high). Historically, Bitcoin and stocks have moved together, but micro and macroeconomic factors have reduced investor confidence. Factors include higher inflation, shifting interest rates, waning enthusiasm for AI-related stocks amid bubble concerns, and widening economic inequality creating a K-shaped economy. Bitcoin is a digital cryptocurrency that operates on a decentralized blockchain and lacks government or banking oversight.
Read at Fast Company
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