Bitcoin is touted as a decentralized alternative to traditional financial markets.
However, now that institutions and governments have embraced it, the largest cryptocurrency by market value has been tracking Wall Street, reacting like a volatile tech stock—influenced by interest rate shifts, tariffs, inflation data, and Federal Reserve remarks.
On Thursday, Barstool Sports founder Dave Portnoy asked the question many investors are asking: Is Bitcoin truly independent from the stock market?
“If the point of Bitcoin is to be independent of the US Dollar and non-regulated, why does it basically trade exactly like the US stock market nowadays?” Portnoy wrote. “Market up, Bitcoin up. Market down, Bitcoin down.”
The correlation has become even more evident during major economic 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 behavior mirroring traditional financial markets is no coincidence.
The shift accelerated following the SEC’s approval of spot Bitcoin ETFs in early 2024, which gave institutional investors new pathways to large-scale exposure.
“This connection happened mainly because big institutional investors began buying Bitcoin and treating it just like risky stocks, especially tech companies, more so following approvals of instruments like the ETFs, which made getting exposure easier for institutions in size,” Marshall told Decrypt.
“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 haven,” 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 Decrypt.”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 Decrypt. “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.”
Edited by James Rubin
