Bitcoin's Correlation with the Nasdaq Remains Elevated Amid Market Shifts
A recent report from Wintermute reveals that Bitcoin (BTC) currently exhibits a correlation coefficient of approximately 0.8 with the Nasdaq‑100 index—implying a strong relationship.
What’s Going On?
Bitcoin is increasingly behaving like a high–beta risk asset, tracking the same directional shifts as major tech and growth stocks, rather than acting as a distinct alternative store of value.
However, the relationship is asymmetric: Bitcoin tends to fall harder than the Nasdaq on negative days, but its gains are often more muted during strong stock rallies.
The elevated correlation stems from deeper institutional integration, asset-allocation overlaps, and shared exposure to macro liquidity trends.
Why It Matters
For crypto investors: A high correlation with equities dilutes Bitcoin’s diversification value. When stocks dip, Bitcoin likely will too.
For portfolios: Including Bitcoin as an “uncorrelated” asset may not hold up in today’s environment; risk models should account for equity-market sensitivity.
For strategy: Given the downside bias (stronger falls, weaker rises), risk-management becomes more critical for those allocating to BTC alongside equities.
My Take
We seem to have passed the phase where Bitcoin was “crypto gold.” Now, it moves with risk assets. That can amplify upside during broad rallies—but can also intensify drawdowns when sentiment sours. With liquidity imperfect and macro uncertainty elevated, portfolios should treat Bitcoin less like a hedge and more like a leveraged equity proxy in the near-term.
For informational purposes only — not investment advice.
