(Bloomberg) -- Bitcoin shrugged off a dip in global stock markets to set another more than 19-month high, a sign of its decoupling from other assets.

The token jumped as much as 4.5% to about $43,940 in New York on Tuesday, adding to a surge over Sunday and Monday that pushed it above $40,000 for the first time in almost two years. In contrast, gauges of global shares and bonds are nursing losses since the start of the week.     

“This divergence underscores the current low correlation of crypto with other traditional macro assets,” Sean Farrell, the head of digital-asset strategy at Fundstrat Global Advisors LLC, wrote in a note.

Bitcoin’s correlations with the likes stocks and gold have ebbed in 2023 as crypto-specific factors helped to spur a 160% climb in the largest digital asset. A key driver of the gains is the expectation that the US will allow its first spot Bitcoin exchange-traded funds, potentially widening demand for the token. The oldest and biggest cryptocurrency was even a standout in the digital-asset market itself, as Ether rose 1.4% and others like Dogecoin, Avalanche and Polygon fell.

Crypto-related stocks also extended gains. Coinbase, MicroStrategy and Marathon Digital all rose for a third day, and are each up more than 300% this year.  

A 90-day correlation coefficient for Bitcoin and MSCI Inc.’s index of world shares has dropped to 0.18 from 0.60 at the start of the year. A similar study for the token and spot gold shows the figure has declined to about nil from 0.36. A reading of 1 indicates assets are moving in lockstep, while minus-1 would show they’re moving in opposite directions. 

“What we’re seeing is a combination of the crypto cycle entering the bullish phase, the macroeconomic environment turning more favorable towards risk assets, and increasingly positive news about the incoming Bitcoin and Ethereum ETFs,” said Greg Moritz, co-founder and chief operating officer at crypto hedge fund AltTab Capital. “We think that this is likely just the beginning and that as we enter 2024, we’ll be seeing very strong growth in digital assets.”

US Outlook

Another industry-specific driver is regulation. Crypto executives are increasingly hopeful that the worst of the US crackdown on the sector is over. 

In the past few weeks, Sam Bankman-Fried was jailed for fraud at FTX, while top crypto exchange Binance and its founder Changpeng Zhao were hit with hefty fines after pleading guilty to US anti-money-laundering and sanctions violations.

“The feeling is the US authorities and regulators have really had their say,” Lucy Gazmararian, managing partner at Token Bay Capital, said on Bloomberg Television. “We could now see more dialog happening with regulators.”

Some technical indicators, such as a momentum gauge called the 14-day relative strength index, suggest Bitcoin’s rally has become stretched. The index stands at 75, above the 70 level viewed as overbought.

At the same time, speculative interest is being stoked by predictions of a Securities & Exchange Commission green light for US spot Bitcoin ETFs by January. Investors have also taken heart from bets on Federal Reserve interest-rate cuts next year.

Online brokerage Robinhood Markets Inc. said in a Monday filing its November notional crypto trading volumes were roughly 75% above October levels.

Whether the rally in Bitcoin lasts will “surely become clearer once a decision is reached on the spot ETF,” research provider Kaiko wrote in a note.   

--With assistance from David Pan.

©2023 Bloomberg L.P.