Bitcoin correlation with stock market: What you need to know
Key Takeaways
- •Bitcoin's correlation with the S&P 500 has shifted from near-zero to meaningfully positive, fundamentally changing how the asset behaves inside a portfolio.
- •In a recent video, Anthony Pompliano traces this transformation from Bitcoin's uncorrelated early years through the COVID-19 pandemic and the approval of spot Bitcoin ETFs in 2024, which brought institutional capital fully into the picture.
- •The result is a Bitcoin that now moves with broader risk-on sentiment rather than against it, and a 'digital gold' narrative that took a serious hit when Bitcoin's correlation with gold turned sharply negative in 2024.
How Bitcoin Lost Its Uncorrelated Status
From roughly 2015 to 2019, Bitcoin's correlation with the S&P 500, bonds, and gold hovered near zero. That wasn't a marketing claim. That was actual data, and it made Bitcoin genuinely interesting to anyone building a diversified portfolio. An asset that doesn't move with everything else is rare, and for a while, Bitcoin was exactly that. It did its own thing, on its own schedule, for its own reasons. Then March 2020 happened. When COVID-19 triggered a broad market sell-off, Bitcoin didn't sit quietly in the corner. It sold off with everything else, correlation spiked, and when central banks flooded the system with liquidity, Bitcoin's recovery looked almost identical to the recovery in high-growth tech stocks. It's a little ironic that the moment that made Bitcoin famous to a new generation of investors was also the moment it stopped being what the previous generation had valued most.
The ETF Moment That Sealed the Deal
The approval of spot Bitcoin ETFs in January 2024 was treated as a victory lap by Bitcoin advocates, and on one level it was. Institutional capital finally had a clean, regulated pathway into the asset. But there's a cost buried inside that win. Once Wall Street portfolio managers can hold Bitcoin through the same infrastructure they use for equities, Bitcoin gets treated like equities. When they rebalance, they sell Bitcoin. When risk sentiment turns negative, they reduce exposure across the board, and Bitcoin is on that board now. As Anthony Pompliano makes clear in his video Bitcoin Has FOREVER CHANGED... And Investors NEED To Understand How, this isn't speculation about what might happen. It's describing what already has.
Our Analysis: Pompliano is right that Bitcoin changed, but he's too diplomatic about what that actually means. Bitcoin becoming correlated with the S&P 500 isn't evolution, it's surrender. You don't get inflation-hedge credibility and risk-asset behavior at the same time. Pick one.
The gold divergence in 2024 is the real story nobody wants to say plainly. When uncertainty spiked, money ran to gold and away from Bitcoin. That's the market telling you exactly what it thinks Bitcoin is.
Institutional adoption didn't mature Bitcoin. It domesticated it. The ETF crowd brought their macro playbook, and now Bitcoin flinches when the Fed sneezes.
What's worth sitting with is the broader implication for the next generation of crypto assets. Bitcoin was supposed to be the proof of concept — the asset that demonstrated you could have something scarce, decentralized, and genuinely uncorrelated with traditional finance. If that thesis is now functionally dead for Bitcoin, it puts enormous pressure on every other digital asset that's borrowed from that narrative. The 'digital gold' framing didn't just fail Bitcoin in 2024. It potentially took the whole framework down with it.
There's also a structural issue that doesn't get enough airtime: the investors who most needed Bitcoin's uncorrelated properties — the ones building genuinely diversified portfolios against systemic risk — are now holding an asset that correlates with the very thing they were hedging against. That's not a minor inconvenience. That's a portfolio construction problem that rewrites the thesis from the ground up. The people who got in early understood Bitcoin as a tail-risk hedge. What they're holding now is a high-beta risk asset with a better story. Those are very different things, and pretending otherwise is the kind of optimism that tends to get expensive.
Frequently Asked Questions
Does Bitcoin go up when the stock market goes down?
Why does Bitcoin now move in lockstep with stocks instead of independently?
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Does Bitcoin still work as a portfolio diversification tool?
Based on viewer questions and search trends. These answers reflect our editorial analysis. We may be wrong.
Source: Based on a video by Anthony Pompliano — Watch original video
This article was created by NoTime2Watch's editorial team using AI-assisted research. All content includes substantial original analysis and is reviewed for accuracy before publication.
