Bitcoin traded like a tech stock after Trump's new tariffs shook global markets, BTC fell 5.5% along with the 5.9% drop in Nasdaq. This is not the first time Bitcoin has reacted this way. So, of course, the question is: Why is Bitcoin acting like tech stocks?
The founder of Barstool Sports, Dave Portnoy, asked what many traders are thinking: If Bitcoin is supposed to be independent of the dollar, why does it move with the stock market?
Bitcoin was designed to be independent of traditional finance. But now it behaves more like a risky asset.
The answer lies in the changing nature of Bitcoin holders. Spot Bitcoin ETFs opened the floodgates to international capital in early 2024. Hedge funds and asset managers now treat Bitcoin like any other high-risk growth asset, similar to tech stocks. This means that its price moves with expectations of interest rates, inflation prints, and Federal Reserve policy.
This does not mean that the fundamental principles of Bitcoin have disappeared. It remains decentralized, scarce, and programmable. But for now, the market is driven by macroeconomic sentiment and large capital flows. Short-term volatility reflects this.
Despite this, many analysts believe that Bitcoin will soon break this correlation.