Practically all week, cryptocurrencies have twisted and turned in the same way technology stocks have, with both sets of assets coming under pressure as the Federal Reserve becomes more hawkish with its policy.

Marko Papic, chief strategist at Clocktower Group, agrees. Bitcoin “is a high-beta risk asset,” he said, adding that “in an environment where the Fed is becoming more hawkish, you don’t really want to own high-beta risk assets.”

Correlation between Bitcoin and tech stocks remains positive — Bloomberg

The 100-day correlation coefficient of the coin and the Nasdaq 100 now stands at 0.40, among the highest such readings going back to 2011. (A coefficient of 1 means the assets are moving in lockstep, while minus-1 would show they’re moving in opposite directions.)

“People are stepping back and saying, OK, what is Bitcoin?,” Victoria Greene, founding partner and chief investment officer at G Squared Private Wealth, said by phone. “Bitcoin is showing a lot more tendency to track with and correlate with the Nasdaq and the market than it is with inflation and uncorrelated currency.”Your key to the crypto universe.Introducing the Bloomberg Crypto newsletter.EmailSign UpBy submitting my information, I agree to the Privacy Policy and Terms of Service and to receive offers and promotions from Bloomberg.

For most of its 13-year history, Bitcoin has enjoyed an environment of easy monetary policy and zero or negative rates. But both stocks and cryptocurrencies have been volatile as of late as the Fed prepares to withdraw pandemic-era stimulus that had been in place for the past two years. While there is no straight through-line from the Fed’s coffers to Bitcoin buy-orders on exchanges, there is a connection, according to analysts who say that less money in the system means fewer dollars going toward crypto, too.

“If this continues in terms of the correlation, we think that crypto could lose its appeal as a hedge and we’re starting to see that right now,” said Anderson Lafontant, senior adviser of advanced planning at Miracle Mile Advisors.

— With assistance by Emily Graffeo, and Elaine Chen(Updates prices throughout.)

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