The Impact of Traditional Markets on Ethereum Price: A Closer Look at Correlations

The correlation between Ethereum (ETH) and traditional market indexes has been on the rise, with ETH showing a stronger connection compared to Bitcoin (BTC). According to data from IntoTheBlock, ETH has a correlation coefficient of 0.7 with the DAX stock index, higher than BTC’s correlation of 0.63. The correlation between ETH and the S&P 500 and Nasdaq 100 is also higher than that of BTC.

This trend is particularly interesting given that Bitcoin recently gained approval for trading on U.S. stock exchanges through spot ETFs, attracting significant inflows. On the other hand, Ethereum’s chances of receiving approval for a U.S.-listed spot ETF are dwindling, with experts placing the likelihood of approval at 25%.

Despite these challenges, financial advisors see Bitcoin and Ethereum playing different roles in a portfolio, with Bitcoin likened to gold and Ethereum to a high-growth tech stock. Since the ETF approvals, ETH has been losing ground against BTC, with the ETH/BTC ratio declining.

The increasing correlation between Ethereum and traditional markets, along with the contrasting fortunes of Bitcoin and Ethereum in the ETF space, highlight the evolving dynamics within the crypto market. Stay tuned for more updates on how these trends continue to shape the crypto landscape.