Bitcoin is advertised as a decentralized alternative to traditional financial markets.
Now that institutions and governments have embraced it, the largest cryptocurrency has followed Wall Street per market value and reacted as a volatile technical share – flued by interest shifts, rates, inflation data and comments from the Federal Reserve.
On Thursday, Barstool Sports founder Dave Portnoy asked the question that many investors ask: Bitcoin is really independent of the stock market?
“If the point of Bitcoin is independent of the US dollar and not regulated, why does it actually act exactly like the American stock market nowadays?” Portnoy wrote. “Markt Up, Bitcoin Up. Markt Down, Bitcoin Down.”
The correlation has become even clearer during major economic events.
After President Donald Trump had imposed new rates on the entry into the US on Wednesday, the stock market responded strongly – the DOW dropped by 3.98%, the S&P 500 fell by 4.84%and the Nasdaq fell 5.97%.
Bitcoin has fallen by 5.5% over the past 24 hours to trade under $ 82,000, far away from his all time near $ 109,000 set in January.
According to Mike Marshall, head of research on Amber Data, the behavior of Bitcoin, where traditional financial markets reflect no coincidence.
The shift accelerated after the SEC of the SEC of Spot Bitcoin ETFs in early 2024, which gave institutional investors new paths to large -scale exposure.
“This connection mainly happened because large institutional investors started buying Bitcoin and treating, just like risky shares, especially technology companies, more following approvals of instruments such as the ETFs, making the exposure easier for institutions in size,” Marshall said, ” Decodeer.
“Now Bitcoin often goes up or down, depending on broader economic conditions, such as interest rates, inflation or Federal Reserve policy,” Marshall continued. “When investors feel self-confident and buy more shares, risk-up bitcoin rises with them; When they get nervous and sell shares, Bitcoin usually also falls.”
Marshall noted that although Bitcoin can still move in response to crypto -specific events, it now responds strongly to the same economic trends that influence traditional shares.
“Bitcoin works effectively as a risky investment that is linked to technology instead of an independent assets or safe port,” said Marshall.
While hedge funds and analysts question Bitcoin’s independence, a deeper reality emerges: Bitcoin may have become part of the system that it has been designed to replace.
“It’s just very young to be arranged,” said Bloomberg ETF analyst Eric Balchunas Decrypt. “Because all this potential growth has been baked in it, I think it just behaves like technical shares.”
Although many emphasize the stock-like behavior of Bitcoin, old believers see the decline as a proven soil, which means that they separate them from short-term speculators with “diamond hands”.
“The price action you see is noise driven in the short term by institutional traders who treat BTC such as technical shares,” said Swan Bitcoin CEO Cory Klippsten Decrypt. “But Bitcoin’s value proposition is not a profit in the short term. It is the long -term output of Fiat. Bitcoin remains the most difficult active that has ever been created.”
Published by James Rubin
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