Opinion by: Vugar Usi Zade, chief operating officer of Bitget
Bitcoin’s price has started to sway with the S&P 500, and a chorus of commentators says this proves crypto has “grown up” and joined the ranks of typical risk assets. That reading misses the deeper melody.
The real story is not about investors chasing excitement when both markets lurch in the same direction. It is about eroding faith in the money that prices everything and, by extension, in the policies that govern it.
Every trade is a fraction. The numerator is the asset. The denominator is the currency. If faith in the denominator weakens, numerators of every kind climb together. Bitcoin (BTC) and equity futures fell in early April and then rebounded almost tick-for-tick after the White House surprised markets with steep tariffs on Asian imports.
The swings seem to say more about the greenback than about risk appetite. The tariff shock raised doubts about US fiscal discipline and the Federal Reserve’s room to respond without reigniting inflation.
Sticky inflation and fiscal sprawl keep the denominator under pressure
The 30-day correlation between Bitcoin and the S&P jumped above 0.4 last month, the highest since 2020, according to RedStone Oracles research. The US Dollar Index (DXY) slid to a 12-month low on the same days; Bitcoin gained 9%; and the S&P rallied 6%.
That is not random. It is a collective hedge — a move away from a denominator suddenly perceived as unstable.
That pattern shows up on trading desks. When the DXY loses half a point intraday, buy orders for Bitcoin and index ETFs jump within minutes, often placed by the same hedge fund algorithms. Machines do not care whether satoshis or semiconductor shares sit on the other side; they care that the denominator is fluttering and tangible assets may reprice once the dust settles.
Headline US inflation has cooled from 9% in 2022 to about 3% today, yet sticky services prices and swelling deficits keep real-yield expectations fragile. Traders no longer ask whether the Fed will tolerate higher inflation; they debate how much.
When the Fed surprised markets with a 50-basis-point cut in December 2024, five-year breakevens jumped to their highest since 2011. Bitcoin cleared $70,000 within four sessions, and the S&P set a record close. Correlation followed credibility — both assets rose because cash felt like a wasting asset.
De-dollarization is no longer theoretical
Pressure also comes from abroad. The BRICS bloc now settles more trade in local currencies and, with some help from the Bank for International Settlements, tested wholesale central bank digital currencies (CBDCs) before the BIS stepped back over sanction concerns. Central banks bought 1,045 tons of gold last year, the largest haul since the 1960s, while trimming Treasury holdings.
Sovereign funds are already testing Bitcoin allocations, and legislatures from Singapore to Argentina have eased rules on using it. Each move may look minor, yet together, they signal a widening search for exits from the dollar.
When official institutions diversify, private capital does not wait on ceremony — it is front-run.
Stocks behave like scarce assets when cash feels elastic
Skeptics argue that Bitcoin trades are like tech stocks because both attract speculative capital. Yet equities themselves morph into store-of-value vehicles when fiat feels stretchy.
Related: Crypto lobby pushes Senate to pass stablecoin bill without debate
The S&P’s price-to-sales ratio sits near all-time highs even as earnings growth slows, a pattern last seen during the late-1990s inflation scare. Capital is paying up for productive assets (just as it pays up for digital scarcity) because both look sturdier than paper promises.
Volatility tells the same tale. Bitcoin’s realized swings in April slipped below those of the Nasdaq for the first time. Dampened moves hint at a maturing holder base and reinforce Bitcoin’s appeal as a reserve asset in waiting.
Correlation is the smoke; fiat fragility the fire
Correlation is fickle. In 2023, Bitcoin decoupled from stocks when US regional banks wobbled, jumping 20% even as the S&P sagged. The weld appears only when doubts about money itself dominate the tape.
Yet smoke points to fire. In the months since the Fed’s December pivot, rolling correlations have spent more time above 0.3 than in the previous 18 months combined. Currency traders call this a “common-factor regime” — a polite way of saying the dollar is the only thing that matters. If that regime persists, even markets for fine art or vintage wine may echo the same beat, indicating that the urge to outrun inflation is spreading through every corner of finance.
Those doubts are multiplying. US gross debt has passed $36.2 trillion (124% of GDP), and the Treasury now spends more on interest than on national defense. The Congressional Budget Office projects deficits further rising with $1.9 trillion already. Investors are wagering that the bill will be met with easier money, so they rotate into anything that cannot be printed at will.
Joint rallies are distress flares, not proof of convergence
Put plainly, a joint surge is the market’s SOS. When the duplicate headlines drive Bitcoin and the S&P higher, investors are not crowning crypto as a tech proxy; they are ring-fencing purchasing power against an overstretched fiscal-monetary mix.
The tandem moves will persist as a warning light on the dashboard until Washington restores discipline and the Fed re-anchors expectations.
Investors do not wait for a perfect policy. They are acting now, leaning into assets with built-in scarcity. In that process, Bitcoin never loses its identity; equities borrow some of its scarcity halo.
The two assets rise together not because they converge but because the ground beneath them shifts in the same direction.
Opinion by: Vugar Usi Zade, chief operating officer of Bitget.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
