It is no exaggeration to say that Bitcoin has slowly evolved into a macro asset. As such, its relationship to major traditional indexes such as the S&P 500 (SPX) and Nasdaq Composite (NDQ) is a key indicator of investor sentiment and the evolution of use cases.
These indices represent important pillars of the traditional financial system. While the SPX reflects broader market trends, the Nasdaq is a tech-heavy benchmark closely tied to growth sectors and innovation. By monitoring how Bitcoin interacts with these indexes, we can see if Bitcoin acts as a risk-on asset correlated with stocks or as a hedge in isolation during times of uncertainty. Masu.
The changing correlation between Bitcoin and traditional assets reveals a shift in market perception. The strong positive correlation suggests that Bitcoin is moving in tandem with stocks, perhaps as a speculative asset tied to risk-on behavior. However, the weakening and negative correlations indicate that Bitcoin is being treated as a hedge, similar to gold, against macroeconomic uncertainty, inflation, and geopolitical risks. These changes can provide valuable context for Bitcoin price movements.
Over the past three months, Bitcoin has significantly outperformed both the SPX and Nasdaq. Bitcoin rose 58.79%, while SPX rose slightly by 5.10% and Nasdaq rose 6.10%. This divergence was particularly evident after the U.S. presidential election, when BTC soared to an all-time high of over $93,000, outpacing traditional indexes by a wide margin.
During this period, the correlation coefficient between Bitcoin and the index fluctuated, but both ended in weak negative territory. The correlation between Bitcoin and SPX has settled at around -0.17, and the correlation with Nasdaq is similarly hovering around -0.17. Before the election, we saw a short-lived positive correlation, likely caused by macroeconomic events that affect all markets. However, after the election, Bitcoin's hedging appeal and speculative enthusiasm gained traction, creating a clear separation.
The weakening correlation indicates that Bitcoin is increasingly moving independently from traditional stocks. While the SPX and Nasdaq reacted to earnings, interest rate expectations, and geopolitical concerns, Bitcoin's price was driven by narratives such as institutional adoption, scarcity, and its role as an inflation hedge.
The one-month data is similar, but shows a more concentrated picture. Bitcoin has gained 36.52% in just 30 days, while SPX has gained 0.99% and Nasdaq has gained 1.72%. The post-election rally was the main driver of Bitcoin's phenomenal performance, as enthusiasm about its long-term potential overshadowed the relatively cautious movements of traditional markets.
The correlation coefficients for this period show an even sharper separation. The correlation between Bitcoin and SPX has decreased to -0.35, and the correlation with Nasdaq has decreased to -0.17. This means that while traditional markets reflect complex investor sentiment, including a balance between optimism about economic recovery and concerns about geopolitical risks, Bitcoin is a more direct bet on future growth. , suggesting that it was considered a hedge against uncertainty.
Interestingly, the correlation with Nasdaq was less negative compared to SPX. This may be due to the overlapping investor bases of Bitcoin and the tech sector, with both attracting growth-oriented and risk-tolerant capital. But the overall trend is clear. Bitcoin is becoming more independent, especially during high-volatility events like elections.
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