A recent Wintermute report reveals a concerning correlation between Bitcoin (BTC) and the Nasdaq, highlighting the cryptocurrency’s susceptibility to tech market downturns. This vulnerability is further emphasized by a shrinking crypto market characterized by weak liquidity. 0.8 remains the key metric indicating how closely BTC follows the Nasdaq, with notable declines during tech downturns. This suggests lingering investor fatigue which contrasts with Bitcoin’s limited gains in periods of tech rally. The report cites a significant outflow of capital from crypto to tech equities. This shift is further evidenced by decreasing ETF inflows, stagnant stablecoin issuance, and thinning exchange liquidity. Consequently, the market dynamics have become increasingly fragile, prompting comparisons to the 2022 bear market. The report suggests that this trend could continue as investors experience a heightened risk-off environment with potential volatility and an increased likelihood of institutional investments shifting towards tech stocks. The report emphasizes these shifts are likely to impact regulatory and technological challenges faced in the past.