The correlation between cryptocurrencies and US equities has reached record levels as both asset classes respond to similar macroeconomic factors. A recent study shows that the 40-day correlation coefficient between the top 100 cryptocurrencies and the S&P 500 Index is around 0.67, approaching the record high of 0.72 set in Q2 2022. This indicates a strong alignment between the two markets. Historically, cryptocurrencies were seen as non-correlated or counter-cyclical to traditional markets, but this perception has shifted as institutional investors and shared economic drivers have influenced both equities and the crypto market. Actions by the Federal Reserve, such as rate cuts and easing policies, have further shaped this correlation. Market participants are closely monitoring Fed commentary and inflation measures to gauge the future direction of both markets.



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