Cryptocurrency is touted as a distributed alternative to traditional financial industry.
However, now that corporations and governments have embraced it, the largest crypto by business value has been tracking Wall Street, reacting like a dangerous technology stock—influenced by interest rate swings, taxes, inflation statistics, and Federal Reserve remarks.
On Thursday, Barstool Sports leader Dave Portnoy asked the question some buyers are asking: Is Bitcoin really separate from the stock market?
” If the level of Cryptocurrency is to be independent of the US Dollar and non-regulated, why does it basically business exactly like the US property market now”? Portnoy wrote. ” Market up, Bitcoin away. Market along, Bitcoin down”.
The relationship has become even more visible during major financial events.
After President Donald Trump imposed new tariffs on imports into the U. S. on Wednesday, the stock market reacted sharply—the Dow dropped 3.98 %, the S&, P 500 fell 4.84 %, and the Nasdaq slid 5.97 %.
Bitcoin is down 5.5 % over the past 24 hours to trade below$ 82, 000, far off its all-time high near$ 109, 000 set in January.
According to Mike Marshall, head of research at Amberdata, Bitcoin’s conduct mimicking classic financial industry is no accident.
The move accelerated following the SEC’s acceptance of area Bitcoin ETFs in early 2024, which gave institutional shareholders new pathways to large-scale coverage.
” This relationship happened mainly because major institutional investors began buying Bitcoin and treating it just like difficult stocks, mainly tech companies, more but after approvals of instruments like the ETFs, which made getting exposure easier for corporations in size”, Marshall told
” Now, Bitcoin often goes up or down depending on broader economic conditions, such as interest rates, inflation, or Federal Reserve policies”, Marshall continued. ” When investors feel confident and buy more stocks, risk-on Bitcoin rises with them, when they get nervous and sell stocks, risk-off Bitcoin usually falls too”.
Marshall noted that while Bitcoin can still move in response to crypto-specific events, it now reacts heavily to the same economic trends influencing traditional stocks.
” Bitcoin effectively acts like a risky investment tied to tech rather than an independent asset or safe have n”, Marshall said.
As hedge funds and analysts question Bitcoin’s independence, a deeper reality emerges: Bitcoin may have become a part of the system it was designed to supplant.
” It’s just really young to be settled down”, Bloomberg ETF analyst Eric Balchunas told . ” Because it’s got all this potential growth baked into it, I think it just acts like a tech stock”.
While many highlight Bitcoin’s stock-like behavior, longtime believers see the downturn as a proving ground, separating those with “diamond hands” from short-term speculators.
” The price action you’re seeing is short-term noise driven by institutional traders treating BTC like tech stocks”, Swan Bitcoin CEO Cory Klippsten told . ” But Bitcoin’s value proposition isn’t short-term gains. It’s the long-term exit from fiat. Bitcoin remains the hardest asset ever created”.
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