Why is Bitcoin's price still directly correlated with the stock market?

[asriloni]

It is at times and isn't at others.  Also you don't specify which stock market in your title.  Sure, I know you're speaking of the US stock market as it how a sizable down day as is bitcoin , as we speak.  There are a lot of other asset classes that are also seemingly or somewhat tied to the US stock market and sometimes everything is.  You can't generalize this though as bitcoin and the US stock market do not always move hand in hand.

It most probably he means US stock market. I often saw Bitcoin follows US stock market's movement. It's anytime when US stock market dump, Bitcoin dump. When US stock market up, Bitcoin is going up as well. It clearly raises assumption if Bitcoin is now tied to the stockmarket.

Bitcoin should be treated as independent asset like gold. However, things changed when Institutional came in. Other than it, i guess it's also because almost all of parties are still treated Bitcoin as stock-like investment.

[SamReomo]

Bitcoin should be treated as independent asset like gold. However, things changed when Institutional came in. Other than it, i guess it's also because almost all of parties are still treated Bitcoin as stock-like investment.

I personally believe that Bitcoin's main growth in value came from those institutional investors because they consider Bitcoin as an asset and that's the reason why it's somehow related to stock market. Bitcoin was initially created as a crypto currency a way to get centralized freedom and it was for everyone but things are somehow different now. Only a small group of people still use it as a payment system while most elites or institutional investors are in it due to its growth.

[Ojima-ojo]

Bitcoin should be treated as independent asset like gold. However, things changed when Institutional came in. Other than it, i guess it's also because almost all of parties are still treated Bitcoin as stock-like investment.

I personally believe that Bitcoin's main growth in value came from those institutional investors because they consider Bitcoin as an asset and that's the reason why it's somehow related to stock market. Bitcoin was initially created as a crypto currency a way to get centralized freedom and it was for everyone but things are somehow different now. Only a small group of people still use it as a payment system while most elites or institutional investors are in it due to its growth.

The fact that bitcoin has a volatile nature makes it hard for stock market analysts to find the exact propeller of the bitcoin market and very sure that bitcoin does not follow any centralized market trends so for that we can't say that bitcoin market depends on stock market realities, although the global trading market goes hand in hand and at that, we ought to pay close attention to all of that.


We can't exactly say which direction Bitcoin will take at whatever time but yeah we can just speculate, in all of that we also need to consider bitcoin's volatile nature.

[davis196]

The tariffs are impacting imported goods into the US, they have nothing to do with bitcoin. There are no tariffs on bitcoin.
So why do many investors still treat bitcoin as if it were a tech stock? Bitcoin is a commodity like gold or oil, not a security or a stock.

Whatever happens to the stock market should have little to no impact on bitcoin, at least in theory.
The market is not rational and seems to have little understanding of what bitcoin is (it is a store of value).

Whatever happens in the world affects both the stock and the crypto markets.
Bitcoin IS a volatile speculative asset. I don't agree with your point that stocks are a speculative asset, while Bitcoin is more like a commodity. BTC is as speculative as all the other speculative assets. Such assets get easily affected by any disturbance on the financial markets. The high price volatility means that their prices are very sensitive to negative news and FUD.
Many "crypto experts" claim that BTC is following the same patterns as the stock market. I can partially agree with their point of view, but bear in mind that there are times, when BTC can go sideways and don't strictly follow the patterns of the stock market.

[qwertyup23]

It is at times and isn't at others.  Also you don't specify which stock market in your title.  Sure, I know you're speaking of the US stock market as it how a sizable down day as is bitcoin , as we speak.  There are a lot of other asset classes that are also seemingly or somewhat tied to the US stock market and sometimes everything is.  You can't generalize this though as bitcoin and the US stock market do not always move hand in hand.

I definitely agree with your position.

First, OP has not specified which specific stock in which the price of BTC is in proportion at. Since the stock market comprises of several classes of corporations which vary depending on its price, you cannot generalize that the whole stock market is tied with the price of BTC.

Second, BTC and stocks are different in nature. Shares of stock are issued by the company upon its incorporation (for a non-stock corporation), while BTC comprises of 21 million which everything is yet to be mined. The number of stocks can be increased by the agreement of the corporation (and upon vote by 2/3 of its stockholders); while BTC cannot be further increased.

Lastly, the stock market is primarily governed by the country's SEC; while BTC is not governed by any regulatory department, agency, or government because the purpose of the latter is to free itself from any control.

[Donneski]

Bitcoin should be treated as independent asset like gold. However, things changed when Institutional came in. Other than it, i guess it's also because almost all of parties are still treated Bitcoin as stock-like investment.

The influx of institutional bodies into the Bitcoin market I know will have some effects existing investors will not likely be happy with and one of them is what's currently happening in Bitcoin coin price correlating with the stock market. The stock market is majorly dominated by these institutions who had deemed it necessary to also heavily invest in Bitcoin and because of the large amounts of Bitcoin in their possession now, there's no way they'll not have a or indirect direct effect on the price of Bitcoin. Bitcoin to them now is also stock-like investment and on daily basis, we'll continue to read the news of Bitcoin market caps on the international news lines like the CNN

[Despairo]

I think @OP is correct, if compare graph of Bitcoin and S&P500, there's a similarity.

Both Bitcoin and S&P 500 hit ATH in 2022, then the price went down in the next year. Then both Bitcoin and S&P 500 made new ATH in 2025, but now both of them keep dropping till now.

So yeah, the market (people who bought it) of Bitcoin and S&P 500 are similar, gold have a different graph compared these two. https://goldprice.org/

 

[Marvell1]

Second, BTC and stocks are different in nature. Shares of stock are issued by the company upon its incorporation (for a non-stock corporation), while BTC comprises of 21 million which everything is yet to be mined. The number of stocks can be increased by the agreement of the corporation (and upon vote by 2/3 of its stockholders); while BTC cannot be further increased.

BTC and stocks are different in nature but the problem is that investors treat it as a speculative asset like stocks instead of treating it as a hedge asset like gold. And for speculative assets, they will try to manipulate, bump and dump, that's why bitcoin price is volatile, not because of its decentralized nature.

Lastly, the stock market is primarily governed by the country's SEC; while BTC is not governed by any regulatory department, agency, or government because the purpose of the latter is to free itself from any control.

Bitcoin ETFs are approved and regulated by the SEC, and the majority of money flowing into bitcoin over the past year has been through ETFs. So don't be surprised to see the correlation between bitcoin and US stocks getting tighter.

[WeedGoW]

Currently Bitcoin and stock market, especially NASDAQ, can be seen moving together. When the stock market grows, Bitcoin also increases, and when the stock market decreases, Bitcoin also decreases. But in fact Bitcoin is a completely different kind of asset. It’s not like a company or share, which depends on specific markets or tariffs. Bitcoin is a product like gold or oil, which is not in control of any person or company. Bitcoin is a coin that is under the control of someone directly block chain is extremely difficult.

[kotajikikox]

In the future I believe this will change, but for now the price is still very much tied to the stock market, which makes little sense to me.
Whenever the US stock market goes up (especially the NASDAQ), bitcoin goes up with it, and vice versa.

A lot of those who have invested in stocks also invest in bitcoin which is probably why it gives the assumption that bitcoin's price is correlated to stocks. When in reality it is just because of how the investors think. If they are taking out their money in one investment they might want to take out their money from other investments as well.

Whatever happens to the stock market should have little to no impact on bitcoin, at least in theory.
The market is not rational and seems to have little understanding of what bitcoin is (it is a store of value).

To be fair, a lot of events could have an impact on bitcoin. Economic events, political events. As long as people react to it and they decide to do something with their bitcoins, the price will change.

[SquirrelJulietGarden]

A lot of those who have invested in stocks also invest in bitcoin which is probably why it gives the assumption that bitcoin's price is correlated to stocks. When in reality it is just because of how the investors think. If they are taking out their money in one investment they might want to take out their money from other investments as well.

I don't think your post is too logical.

People say Bitcoin and stock markets are correlated with each other by looking at relayed charts or correlation between two markets. I don't believe that people say it because they have experience and invest in both stocks market and Bitcoin market. It's only your thinking and backed by nothing.

Correlation between stocks market and Bitcoin market can be positive or negative and sometimes two markets move together with strong correlation but other times when Bitcoin is in its bullish parabolic months, stock market will be left behind.

[RockBell]

I personally believe that Bitcoin's main growth in value came from those institutional investors because they consider Bitcoin as an asset and that's the reason why it's somehow related to stock market. Bitcoin was initially created as a crypto currency a way to get centralized freedom and it was for everyone but things are somehow different now. Only a small group of people still use it as a payment system while most elites or institutional investors are in it due to its growth.

And bitcoin have earned it self more recognition and that is why it keeps increasing in size and that is why people are rushing just to invest in bitcoin and since they are all virtual values and the fact that bitcoin and stocks are getting almost the same rating is actually giving me joy,  because for a very long time now bitcoin have not really gotten a good rating and this is because they don't exactly understand how the investment works.

People are found of jumping into conclusions especially when they don't understand what they are doing exactly because they have decided not to give knowledge a chance and this is one of the reasons why they judge even what they don't understand and they clearly don't want to understand. And even people that are using it as an option for payment is just there own initiatives, and since its a matter of choice, anyone can decide that.

[FortuneFollower]

Bitcoin should be treated as independent asset like gold. However, things changed when Institutional came in. Other than it, i guess it's also because almost all of parties are still treated Bitcoin as stock-like investment.

I personally believe that Bitcoin's main growth in value came from those institutional investors because they consider Bitcoin as an asset and that's the reason why it's somehow related to stock market. Bitcoin was initially created as a crypto currency a way to get centralized freedom and it was for everyone but things are somehow different now. Only a small group of people still use it as a payment system while most elites or institutional investors are in it due to its growth.

The fact that bitcoin has a volatile nature makes it hard for stock market analysts to find the exact propeller of the bitcoin market and very sure that bitcoin does not follow any centralized market trends so for that we can't say that bitcoin market depends on stock market realities, although the global trading market goes hand in hand and at that, we ought to pay close attention to all of that.


We can't exactly say which direction Bitcoin will take at whatever time but yeah we can just speculate, in all of that we also need to consider bitcoin's volatile nature.

Broader market affects the crypto market, that is all to it.

We can't ignore it, we can only look after the broader picture and keep the info to ourselves to analyze.

[headingnorth]

It is at times and isn't at others.  Also you don't specify which stock market in your title. Sure, I know you're speaking of the US stock market as it how a sizable down day as is bitcoin , as we speak.  There are a lot of other asset classes that are also seemingly or somewhat tied to the US stock market and sometimes everything is.  You can't generalize this though as bitcoin and the US stock market do not always move hand in hand.

First, OP has not specified which specific stock in which the price of BTC is in proportion at. Since the stock market comprises of several classes of corporations which vary depending on its price, you cannot generalize that the whole stock market is tied with the price of BTC.

I CLEARLY SPECIFIED THE US STOCK MARKET LITERALLY WITHIN THE FIRST PARAGRAPH OF MY OP. Learn how to read!

[d5000]

I remembered I'd seen a graph about the exact correlation (NASDAQ-100 vs. Bitcoin) which also may tell us a bit about the causes for the grade of correlation (I had started a very similar thread in the Spanish forum). It only covers up to mid-2024, but is nevertheless interesting:


Source: Coin Bureau

Despairo has already shown us graphs where we can see that the macro movements (long term bear / bull) were indeed quite similar in the last years. But here we see the micro movements. And we can see that there seem to be some periods with a high correlation (late 2021 to early 2022 for example), while then in other phases (mid-2022, late 2022, late 2023 to early 2024), the correlation is lower.

My theory is that during the low-correlation phases there were standout crypto-related events and news driving the Bitcoin price, for example the Terra-Luna and FTX crashes in 2022 (bearish events) and the ETF approval in late 2023/24 (a very bullish Bitcoin event while the stock market ran sideways or only slightly bullish). In the remaining periods, traders are clueless about Bitcoin's fundamentals and thus "hang" to the stock market. I'll see if I find more recent data to confirm this assumption for 2025.

Edit: I remember that the correlation before ca. 2018 was quite low, and that's likely because there wern't professional traders and investors in the game yet. For example, 2014 and 2018, the major BTC bear markets pre-2020, were bullish (although with some volatility) in the S & P 500.

[fikrett]

Bitcoin’s correlation with stocks persists due to macroeconomic factors (interest rates, inflation) and institutional adoption—traded like a risk asset, not yet a true "safe haven." When will it

When investors fear to pour liquidity overall, surely they start to fear to pour it into the crypto market even more.

[Slimzeee]

Be it NASDAQ, BTC, ETH, or any other asset, all I can say is that traders are ready to milk the market. So yes, while Bitcoin is not financially tied to any stock, the rise and fall of other stocks or coins being traded will still impact BTC because they operate in the same economic environment.

What I see happening here is simply a matter of demand theory.

[Smartprofit]

In the future I believe this will change, but for now the price is still very much tied to the stock market, which makes little sense to me.
Whenever the US stock market goes up (especially the NASDAQ), bitcoin goes up with it, and vice versa.

The tariffs are impacting imported goods into the US, they have nothing to do with bitcoin. There are no tariffs on bitcoin.
So why do many investors still treat bitcoin as if it were a tech stock? Bitcoin is a commodity like gold or oil, not a security or a stock.

Whatever happens to the stock market should have little to no impact on bitcoin, at least in theory.
The market is not rational and seems to have little understanding of what bitcoin is (it is a store of value).

Unlike publicly traded companies, bitcoin is not a good or service that relies on the volume of sales or on tariffs to determine its price.
In a more rational market bitcoin would not be so closely correlated to the stock market or treated as a speculative asset.

Whenever you are investing in a highly centralized company controlled by a group of people, there are always going to be trust issues.
So with stocks you are investing in a truly speculative asset. Because the humans controlling it are unpredictable, easily manipulated and corrupted.

But bitcoin is not subject to such trust issues, because it isn't controlled by anyone.
That is the revolution and beauty of bitcoin. The open-source code is a known quantity not subject to unpredictable human behavior and corruption.

If you believe that Bitcoin is a store of value, then it is logical to assume that the price of Bitcoin is highly dependent on the total money supply. Simply put, the more money there is in the world, the higher the price of Bitcoin.

When people have extra money that they cannot spend on everyday expenses - rent, utilities, food or clothing, they start investing. In doing so, they buy stocks or Bitcoin. How do you know if there is a lot of money in the world or not? Usually, a decrease in the discount rate (refinancing rate) leads to an increase in the total money supply, and its increase - on the contrary, to a decrease in the total money supply.

This is exactly the connection between the stock and cryptocurrency markets - both serve to accumulate (consolidate, sterilize) excess money supply, which would otherwise end up in the consumer market and lead to the fact that goods, works and services consumed by the population and organizations would sharply increase in price.

That is, the very presence of such entities as Bitcoin and stocks in the world allows you to control consumer inflation. This is the benefit of the stock and cryptocurrency markets for society.

[DiMarxist]

We all believed that bitcoin is a store of value asset and it control by demand and supply. It is the demand that determine the supply and the availability of the demand and supply control the price. And in either ways people are benefiting from bitcoin. Both in decreasing time because people or investors would stuck their wallets with bitcoins and in the increasing time people would start selling to take profit.

Since Gold is not correlated with the stock market let bitcoin also be independent and not tied to the stock market and the tie is now affecting bitcoin because US is controlling the stock which is directly have impact on bitcoin. This macroeconomics tariff war has affected the stock and in turn to bitcoin.

[serjent05]

It is simply because people are full of assumptions.  They simulate things on their mind and consider variable changes in the economy.  They will then create a theory of cause and effect that Bitcoin cannot escape.  Even though Bitcoin I believe is not directly correlated to many stocks on the market  (probably it has on some specifics)  Bitcoin is indeed affected by the ripple effects and the speculations especially when people behind wanted to show it that way.

We all know oftentimes there are players behind the scenes, and there are analyst that has wide imaginations making connections even if they don't really have.  With these two factors, manipulators (the one who works behind the scene) and theorist (the one who proposes the idea), once combined can establish a solid belief in one thing.  Thus people who have the attitude of being a sheep tends to follow the idea.