BTC’s Independence: Bitcoin often moves independently of traditional markets, driven by supply mechanics, halving cycles, and investor sentiment rather than earnings reports or interest rates.
Correlation Trends: During global crises (like COVID), BTC has shown temporary correlation with stock indices like S&P 500, but it tends to decouple as markets stabilize.
Inflation Hedge Theory: BTC is promoted as “digital gold,” a hedge against inflation. However, short-term volatility can challenge that narrative.
Interest Rate Effects: Rate hikes usually hurt risk assets—including BTC—due to reduced liquidity, though long-term believers often buy dips.
Regulatory Pressure: Traditional markets are heavily regulated; BTC faces evolving scrutiny (e.g., ETFs, SEC lawsuits), which adds uncertainty.
Institutional Entry: As more institutions (BlackRock, Fidelity) enter BTC, its behavior might start mimicking traditional markets more closely.
Retail Sentiment: BTC often reflects retail emotion—FOMO during bull runs, panic during crashes—more dramatically than conventional assets.
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