Kaiko Research revealed that Bitcoin's correlation with equities is on the rise, with a 90-day correlation reaching 0.17 last week after hitting a multi-year low of 0.01 in March. This trend coincided with a significant increase in trading volume in Brazil, surpassing that of the dollar.

In the week of May 5, Bitcoin's 90-day correlation with equities rose to 0.17, a notable increase from its multi-year low of 0.01 in March, according to Kaiko's research report dated May 13. Despite this uptick, Bitcoin's correlation with risk assets remains below its peak of 0.6 observed during bull markets. Since the beginning of 2024, Bitcoin has maintained a near-zero correlation with the European equities index STOXX 600, and its correlation with China's CSI 300 equities index remains below zero.

Kaiko attributed these recent changes to a sell-off of risk assets in April driven by macroeconomic headwinds and geopolitical tensions.

Regarding adoption in Brazil, the research report highlighted a surge in trading volumes. Between January and early May 2024, the Brazilian real (BRL) trading volume amounted to $6 billion, making it the largest crypto market in Latin America and the seventh-largest fiat currency market globally. BRL trading volumes grew by 30% compared to the previous year and outpaced USD trading volumes since January. Stablecoins accounted for nearly half of all BRL trading, while Bitcoin and Ethereum accounted for 43% of BRL trade volume.

Additionally, Kaiko reported other data, including the divergence of prices for Ethereum puts and calls since March, which could indicate impending volatility as the US SEC considers spot Ethereum ETFs on May 23. Despite foreign crypto ETF approvals, markets have not seen significant stimulation. For example, Hong Kong's OSL exchange experienced volumes of $1.7 million at the end of April, following the approval of spot Bitcoin and Ethereum ETFs on April 15, compared to volumes close to $8 billion in January when the US approved spot Bitcoin ETFs.

Finally, Bitcoin fees surged after the Bitcoin halving but declined following initial interest in the Bitcoin Runes Protocol. Kaiko warned that reduced fees could lead to selling pressure among crypto mining companies, potentially negatively impacting markets.