Bitcoin is down nearly 2% today in the first dip below $87K since December 2.
Bitcoin has been a good proxy for risk assets this year but lately has underperformed that metric. If it re-converges, then it points to downside risks for the Nasdaq.
There is also an argument that they should disconnect anyway, as bitcoin is being left behind in all the enthusiasm for AI. In terms of catalysts, bitcoin got a big lift at this time last year from Trump's election and deregulation around it but hasn't been able to capitalize on that. On December 15 of last year, bitcoin was trading just above $100K.
The risk is that bitcoin is increasingly viewed as 'yesterday's trade' and a technology that isn't really capable of disruption, or not nearly at the scale of AI. That could lead to a persistent slide in enthusiasm and a steady erosion in prices, particularly if we see falling risk appetite.
