Analyst: Bitcoin Highly Correlated with Russell 2000 Tech Sector

BlockBeats News, January 30th, JPMorgan analysts found that Bitcoin has the highest correlation with small-cap tech stocks, especially with the Russell 2000 tech sector. This correlation tends to peak during strong tech market performance or sell-offs.

“Both Bitcoin and altcoins are like this, although the former has a higher average correlation,” JPMorgan analysts led by Managing Director Nikolaos Panigirtzoglou stated in a report on Wednesday. “The fact that cryptocurrencies are more correlated with smaller rather than larger tech stocks makes sense given the reliance of cryptocurrencies on venture capital and the focus of blockchain/crypto innovation usually on smaller rather than larger tech companies.”

The Russell 2000 Index is a U.S. stock market index that tracks the smallest 2,000 stocks in the broader Russell 3000 Index.