Bitcoin's recent weakness could be signaling an upcoming correction in stocks, according to Stifel's chief equity analyst Barry Bannister. Bitcoin reached its all-time high of $73,797.68 on March 14 before quickly correcting, and it has struggled to hold the $70,000 mark since, barring a handful of blips. On Thursday, the S & P 500 briefly touched 5,500 for the first time after notching its most recent record close earlier in the week.
Many see bitcoin as "digital gold," but Bannister said he sees it as a speculative instrument driven by excess dollar liquidity. As such, it's always been sensitive to dovish Federal Reserve pivots. In 2020, it became closely correlated with the Nasdaq 100 when the central bank injected trillions of dollars of rescue money into the economy during the Covid-19 crisis.