Examining Bitcoin’s Correlation with Tech Stocks in Current Market Dynamics

Bitcoin is increasingly regarded by institutional investors as a macro-sensitive asset, aligning its trading behaviour with technology stocks. Recent events, specifically tariffs imposed by former US President Trump, have prompted Bitcoin’s price fluctuations to mirror those seen in major stock indices. Despite current volatility, data indicates Bitcoin’s historic volatility has decreased due to growing institutional participation, signifying a structural shift in the asset’s market dynamics. Future price expectations remain uncertain, balancing potential gains against inevitable fluctuations.

Institutional investors increasingly regard Bitcoin as a macro-sensitive asset, drawing parallels to technology stocks. Historically, Bitcoin’s trading behaviour diverged from traditional assets but recent events, such as President Trump’s tariff announcement, have aligned its volatility with that of tech stocks. For instance, after Trump’s tariffs were disclosed, Bitcoin’s value plummeted from $84,600 to $75,000 within a week, paralleling declines in the S&P 500 and Nasdaq 100.

Adrian Fritz from 21Shares indicates that Bitcoin’s correlation to major stock indices reflects its evolving role amid institutional behaviour and policy changes. As Bitcoin becomes viewed similarly to tech stocks, institutional trading patterns are synchronising with broader macroeconomic events. This connection intensified as Trump’s policies aligned with a crypto-positive narrative, resulting in Bitcoin responding like other risk-on assets during market fluctuations.

The influence of Trump’s tariffs bound Bitcoin to traditional market risks, leading to mutual declines across assets in market downturns. During a recent flight to safety, Bitcoin, alongside the Nasdaq and S&P 500, experienced a decline of around 15%. Conversely, following the announcement of a suspension of tariffs, Bitcoin surged 8.2%, indicative of macro-driven sentiment rather than fundamentals, illustrating its connectivity with equity markets.

Ferdinando Ametrano describes Bitcoin as a thermometer of globalisation, with varying perceptions of its role in the market. While some view it as akin to tech stocks, others align it with digital gold as a safe haven. He posits that the ongoing correlation with equities reflects the prevailing market activities during volatile periods.

Despite the recent volatility, data suggests Bitcoin’s volatility has diminished. Over five years, its 90-day annualised volatility has decreased from 95% in March 2021 to 52% in March 2025, signalling a structural shift towards institutional investment. Factors driving this change include the rise of regulated financial instruments enabling diverse trading strategies, fostering tighter market structures.

Max Shannon reiterates that Bitcoin’s continuous liquidity from being a 24/7-traded asset contributes to improved market depth. As institutional investment rises and market infrastructure evolves, the historical volatility of Bitcoin may further decrease.

Looking forward, expectations for Bitcoin prices remain focused on the balance between volatility and opportunity. With Trump’s pro-crypto stance expected to influence future policies positively, new institutional investors may enter the market as regulatory frameworks improve. Ametrano predicts Bitcoin may reach new heights in 12-18 months while acknowledging inevitable price fluctuations as part of its ecosystem. Investors should remain cognizant of these dynamics.

The authors do not hold any shares in the securities mentioned. For further information on editorial policies, consult Morningstar’s guidelines.