Meanwhile, the Biden administration is preparing to release an initial government-wide strategy for digital assets next month and task federal agencies with assessing the risks and opportunities they pose, according to people familiar with the matter.
Antoni Trenchev, co-founder and managing partner of Nexo, cites Bitcoin's correlation with the Nasdaq 100, which is currently near the highest level in a decade.
“Bitcoin is being hit by a wave of risk-off sentiment. For more clues, keep an eye on traditional markets,” Trenchez said. "The fear and unease among investors is palpable."
“Also the correlation between Bitcoin and Cathie Wood's ARK Innovation ETF is a pandemic example of speculative risk taking. That correlation stands at around 60% year-to-date, versus 14% for the price of gold,” according to Katie Stockton, founder and managing partner of Fairlead Strategies, a research firm focused on technical analysis. "We recommend classifying Bitcoin and altcoins as risky assets rather than safe havens."