Alphabet, Google’s parent company, experienced a significant drop in its share price, resulting in a $180 billion market cap loss. This decline contributed to an overall decrease of over $280 billion in the combined market value of the top seven tech stocks, known as the “magnificent seven.” These tech firms, including Apple, Microsoft, Meta, Amazon, Nvidia, and Tesla, make up a quarter of the S&P 500 index. The tech selloff has raised concerns about a potential tech recession. While most of the “magnificent seven” saw their share prices decline, Microsoft was the only exception, reporting better-than-expected growth in its Azure business. The widespread tech selloff has led to a five-month low for the S&P 500. Google search trends also reflect fears of a stock market crash, with searches for the term increasing by 233% in the past week. In contrast, the cryptocurrency market has been trending upward, with a 16.3% increase in market cap to $1.3 trillion. Bitcoin, Ether, BNB, and XRP have all seen notable gains over the last seven days. However, the crypto market has proven vulnerable to macroeconomic conditions in the past. While some speculate on Bitcoin’s potential decoupling from tech stocks and the S&P 500, previous research suggests that Bitcoin still trades like a tech stock due to its extreme volatility. Nevertheless, Bitcoin can serve as a hedge against the U.S. dollar and has shown signs of decoupling from the Nasdaq 100 in recent months. Some observers view recent investor movements as a “flight to safety” towards Bitcoin, particularly as banking stocks have experienced significant declines.
