Bitcoin’s Correlation with Tech Stocks and Future Price Outlook

Bitcoin is increasingly correlating with technology stocks and is treated similarly by institutional investors, influenced by macroeconomic factors and political events. Recent trends show a decrease in Bitcoin’s volatility as institutional participation grows. The future outlook suggests a volatile yet opportunistic environment for Bitcoin prices, particularly influenced by regulatory developments.

Bitcoin has recently exhibited a notable correlation with technology stocks, particularly evident during significant market events such as Trump’s tariff announcements. In a marked selloff, Bitcoin fell by 10.5%, closely mirroring the S&P 500’s drop of 11.6% and the Nasdaq 100’s 12%. Adrian Fritz, head of research at 21Shares, explains that this correlation reflects Bitcoin’s evolving perception as a macro-sensitive asset influenced by institutional trading and policy changes.

Institutional investors have started treating Bitcoin akin to tech stocks, which results in synchronised trading patterns during economic shifts. This phenomenon was particularly pronounced during Trump’s pro-cryptocurrency measures, indicating that while Bitcoin is decentralised, its trading is influenced by broader market sentiments. WisdomTree’s Dovile Silenskyte emphasises that during periods of market volatility, Bitcoin experiences significant declines just like traditional equities.

Trump’s attempts to position the U.S. as a cryptocurrency hub attracted institutional investments but also tied Bitcoin’s fate to political shifts affecting conventional markets. Fritz notes that this relationship has cemented Bitcoin’s status as a risk-on asset, leading to declines paralleling the Nasdaq and S&P 500 during market panics. Conversely, when tariff news improved, Bitcoin rallied sharply, exemplifying its responsiveness to macroeconomic developments.

Ferdinando Ametrano, managing director at CheckSig and professor at Milan-Bicocca University, articulates that Bitcoin serves as an indicator of global economic sentiments. While some view it as akin to tech stocks, others consider it a digital safe haven. The prevailing associations, particularly during moments of market stress, highlight its connection to equities, overshadowing its potential as a buy-and-hold asset.

Despite recent fluctuations, evidence suggests Bitcoin’s volatility has decreased significantly, evidenced by a drop in its 90-day annualised volatility from 95% in March 2021 to 52% in March 2025. Silenskyte attributes this to Bitcoin’s shift towards institutionalisation, which incorporates regulated financial products that enable more sophisticated trading strategies.

The increasing participation of institutional investors has transformed Bitcoin’s market dynamics by creating tighter bid-ask spreads and mitigating historical gaps. CoinShares’ Max Shannon points out that Bitcoin’s continuous trading attracts liquidity, enhancing market stability and potentially reducing volatility.

Looking forward, although Trump’s re-election could result in a more favourable landscape for cryptocurrency, potential volatility remains. Silenskyte foresees a blend of risks and opportunities, asserting that market liquidity will heavily influence Bitcoin’s trajectory. As new regulations unfold in Europe and institutional investment continues, Ametrano anticipates Bitcoin reaching new highs within 12 to 18 months, despite inevitable price fluctuations.