Bitcoin Correlation With Wall Street Hits New High — Institutional Era Fully Arrives

A new wave of institutional activity is blurring the line between Bitcoin and traditional equities. Analysts warn that BTC correlation with the S&P 500 has reached its highest level since 2021 — changing its role in diversified portfolios.

Bitcoin days as a “non-correlated hedge” may be numbered. According to recent data published by Arxiv Research and Bloomberg Intelligence, BTC 90-day rolling correlation with U.S. stock indices has surged to 0.84, its strongest alignment in nearly four years.

This comes amid unprecedented inflows into spot Bitcoin ETF, pension funds testing limited exposure, and portfolio models now treating Bitcoin as a macro-sensitive asset rather than a contrarian play.

Institutional investors appear to be trading BTC alongside tech equities and index futures — a behavior pattern driven by risk-on sentiment and algorithmic models linking volatility cycles. As one hedge-fund strategist put it on X, “Bitcoin has become the Nasdaq with better memes and harder money.”

While some crypto veterans worry this correlation erodes Bitcoin role as “digital gold,” others see it as proof of maturity and mainstream integration. The growing overlap between traditional and crypto capital could stabilize liquidity and reduce retail-driven volatility in the long term.

Still, a decoupling could occur if global monetary policy diverges — for instance, if the Fed tightens while Asian liquidity rises. Traders will be watching for signs of macro divergence before year-end.

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