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Bitcoin (BTC), often referred to as “digital gold” or now even as “digital capital” by Strategy’s Michael Saylor, has continued sparked debate among traders and economists.
Recent trends, highlighted in an extensive report from Coin Metrics, suggest that the flagship cryptocurrency may finally be decoupling from traditional assets like equities and gold, especially as correlations have fallen near zero.
In an extensive research report, Coin Metrics examines Bitcoin’s (BTC) behavior across different market conditions, its relationship with interest rates, and its evolving risk profile as of May 2025.
The U.S. Federal Reserve’s policies, particularly interest rate changes, significantly impact markets, including Bitcoin.
Over the past decade, we’ve seen shifts from zero-interest rates to aggressive hikes and recent cuts. Bitcoin’s correlation with interest rates is generally low, but patterns emerge during policy shifts:
Since 2023, with recent rate cuts, Bitcoin’s performance has been neutral to positive, and correlations have edged toward zero, suggesting a transitional phase.
Recent data indicates Bitcoin’s 90-day correlations with the S&P 500 and gold have fallen near zero, a rare occurrence typically seen during major market catalysts or shocks.
For instance, in 2019, China’s ban on Bitcoin and, more recently, the approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC) both pushed these correlations close to zero.
Historically, such low correlation periods last 2-3 months and often precede moderately positive returns for Bitcoin.
At the time of writing, these low correlations began in December 2024, suggesting a potential period of outperformance for Bitcoin compared to traditional assets.
However, Bitcoin’s beta to the S&P 500 was high in 2024, amplifying gains and losses.
This indicates a close linkage to equities, but it seems to be declining in 2025, suggesting less dependence on the stock market.
Bitcoin’s realized volatility, once exceeding 80-100% due to rapid price swings, has declined significantly since the 2021 bull market.
Now, it has stabilized at 50-60%, aligning closely with technology stocks like NVIDIA (NASDAQ:NVDA).
This reduction likely reflects Bitcoin’s maturation, with a broader and more stable ownership base, including greater institutional participation, which tends to reduce short-term volatility.
Despite this, Bitcoin remains a risk-on asset, not a safe haven like gold, which is usually preferred during periods of heightened risk aversion.
Bitcoin’s potential decoupling from traditional markets has been a subject of ongoing discussion among financial researchers and economists.
As the flagship cryptocurrency continues to evolve, researchers at Coin Metrics have delved into recent data and historical trends to provide a comprehensive analysis of Bitcoin’s behavior across different market regimes, its correlations with equities and gold, and its evolving risk profile.
Over its 16-year history, Bitcoin has been variously labeled as “digital gold,” a “store of value,” and a “risk-on asset.”
These labels reflect its perceived role as a hedge against inflation, a safe haven during times of economic uncertainty, or a speculative investment that thrives in bullish markets.
However, Bitcoin’s actual behavior often deviates from these narratives, prompting questions about whether it is a unique asset class with its own internal drivers, or simply a leveraged expression of existing risky assets like stocks.
The U.S. Federal Reserve’s policies, particularly changes in interest rates, affect market liquidity and investor risk appetite, which in turn impacts Bitcoin.
To analyze this, it is useful to segment Bitcoin’s history into five key regimes based on the Federal Funds Rate (FFR):
This analysis indicates that while Bitcoin’s correlation with interest rates is generally low, shifts in monetary regimes, especially tightening cycles, significantly affect its behavior.
For instance, during the 2022 tightening cycle, as the Fed rapidly raised interest rates, there was a period of high correlation between Bitcoin and the S&P 500.
However, as the Fed pivoted to begin cutting interest rates in early 2023, this correlation quickly fell to nearly zero.
To assess decoupling, Coin Metrics examined Bitcoin’s 90-day correlations with the S&P 500 and gold.
Recent data, as of May 2025, shows these correlations have fallen near zero, a phenomenon typically seen during major market catalysts or shocks.
For instance, in 2019, China’s unexpected ban on crypto exchanges pushed these correlations low.
Similarly, in early 2024, the U.S. SEC’s approval of the first spot Bitcoin ETF drove these correlations close to zero.
Both periods lasted 2-3 months and were
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