Bitcoin's Correlation with Stocks Raises Concerns about its Role in Portfolios

Bitcoin's reputation as digital gold has been a cornerstone of the cryptocurrency market for years. However, recent data suggests that this narrative may no longer hold true.

A comparison between Bitcoin and physical gold reveals that the former has become increasingly correlated with the S&P 500. Between 2014 and 2019, Bitcoin's correlation to the S&P 500 was essentially zero, but in March 2026, it hit 0.74. This means that when the stock market moves, Bitcoin now follows suit.

The shift in correlation can be attributed to the arrival of spot Bitcoin ETFs between 2024 and 2026. These funds have brought institutional capital into the cryptocurrency market, which has led to a more traditional financial system-like behavior from Bitcoin.

Bitcoin's increased volatility is also evident when compared to other assets. Its daily volatility is roughly 3 to 5 times higher than the S&P 500, making it a high-beta asset. This means that when markets rally or fall, Bitcoin rallies or falls even harder.