Bitcoin is Riding the Stock Market Train

Bitcoin’s Correlation Report, January 2025

One of the big themes I've been hammering for quite some time already is that Bitcoin is not an uncorrelated asset.

That was once part of the narrative to sell Bitcoin as the ultimate addition to your portfolio.

And back then, a long time ago, that was kind of true.

But times have changed and these days you better feel the pulse of what's going on with risk assets to understand where Bitcoin is going.

Let's talk about that.

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Bitcoin is Riding the Stock Market Train

The Takeaway

Bitcoin's correlation with the NASDAQ has surged to levels not seen since 2022, while its relationship with gold has weakened.

In the current market environment, Bitcoin moves in lockstep with risk assets, trading slightly below but close to its expected value relative to the NASDAQ.

This risk-on dynamic extends to the broader crypto ecosystem, where mining stocks show significant undervaluation while MicroStrategy maintains its premium.

The upcoming FOMC meeting will likely drive short-term price action given these strong correlations.

Correlations Going Through the Roof