“Nvidia’s $4 Trillion Milestone Fuels Bitcoin Surge: Analyzing the Waning Correlation”

Good Morning, Asia: Market Overview

Welcome to your daily Asia Morning Briefing, where we recap significant market movements and provide analysis of the ongoing trends impacting the cryptocurrency landscape. As we delve into today’s news, one particular event stands out: Nvidia’s remarkable ascent to a historic $4 trillion market cap, the first-ever company to achieve this milestone. This achievement might have acted as a catalyst for Bitcoin (BTC) to break free from its tightly coiled trading range and surge towards new all-time highs.

Nvidia’s Impact on Bitcoin’s Price Movement

According to CoinDesk market data, Bitcoin is currently trading at approximately $110,900, having rallied during U.S. trading hours to exceed $111,000 and briefly touch its all-time high. Analysts at Glassnode previously described Bitcoin’s recent market activity as relatively quiet, characterized by declining on-chain transactions, minimal miner revenues, and suppressed fees.

Rather than viewing these factors as bearish indicators, Glassnode emphasized that the market has matured and is increasingly dominated by large-value institutional transactions and cautious long-term holders. This shift in market dynamics demonstrates a growing confidence among institutional investors, which may have been spurred by Nvidia’s unprecedented achievement.

Understanding the Waning Correlation

Despite the positive influence Nvidia’s milestone has had on Bitcoin, data indicates that the correlation between the two may be short-lived. Initially, the correlation between Nvidia and Bitcoin peaked above 0.80 during the AI-driven euphoria of early 2024. However, recent data shows a dip to approximately 0.36, suggesting a potential decoupling as investor focus shifts.

While Nvidia’s milestone served as a trigger for Bitcoin’s breakout from weeks of price inertia, it’s essential to note that Nvidia’s share prices may eventually correct, given their inherent volatility. Nevertheless, this weakening correlation may allow Bitcoin’s price to maintain resilience, even if Nvidia’s stock experiences fluctuations.

Australia’s CBDC Initiative: Project Acacia

In other news, Australia has made strides in its Central Bank Digital Currency (CBDC) initiative, known as Project Acacia. The Reserve Bank of Australia has named 24 industry participants to trial real-world applications of digital money in tokenized asset markets. This ambitious project aims to explore programmable digital money within real-world financial workflows.

The trials will cover various asset classes, including bonds, carbon credits, private markets, and trade receivables. Nineteen of the projects will involve live transactions, while five will remain at the proof-of-concept stage. The Australian Securities and Investments Commission (ASIC) has granted targeted regulatory relief to facilitate testing with real assets, furthering its commitment to responsible innovation in digital finance.

While Australia pushes forward with CBDC development, the Bank of Canada has reportedly shifted its focus away from creating a retail CBDC. This decision arises amid concerns that such a system could enable government surveillance, allowing authorities to monitor every transaction, unlike the anonymity that cash provides.

Current Market Movements

As of now, Bitcoin is hovering around $109,000, with institutions defending critical support levels. Light resistance is noted at $110,000, showcasing Bitcoin’s resilience despite stagnant wallet activity and ongoing regulatory uncertainty. Macro conditions, including a weakening U.S. dollar and steady odds of a rate cut, continue to bolster corporate appetite for risk assets, according to insights from CoinDesk’s market analysis.

In the world of Ethereum (ETH), the cryptocurrency closed a volatile 23-hour session up by 2.8%. Robust institutional volume and resilience above $2,650 signal continued bullish positioning among investors amidst market uncertainty.

In contrast, gold prices have faced extended losses for a second day, hovering near $3,285. Factors such as reduced July Fed rate cut expectations, a strong U.S. dollar, and firm Treasury yields are weighing on the precious metal. However, concerns over trade tariffs and upcoming FOMC minutes have helped limit further declines.

Asia-Pacific Market Response

The Asia-Pacific markets opened mixed on Thursday as investors assessed the Bank of Korea’s decision to hold interest rates and U.S. President Trump’s imposition of a 50% tariff on Brazilian imports. This move cites unfair trade and retaliation over the prosecution of Bolsonaro, with Japan’s Nikkei 225 index down by 0.45%.

Meanwhile, U.S. stock futures remained mostly flat on Wednesday evening after the S&P 500 managed to recover some losses from the tariff-induced decline, with Dow futures slipping by only 37 points.

Other Notable Cryptocurrency News

In the realm of U.S. digital assets, there is a hearing scheduled during ‘Crypto Week’ regarding digital assets tax policy (CoinDesk). Additionally, Pump.fun plans to distribute a 25% revenue share with token holders, according to sources (Blockworks). In legal matters, a judge has recommended dropping Logan Paul’s ex-assistant from the ‘CryptoZoo’ lawsuit (Decrypt).