Analysts Assess Bitcoin’s Potential Decoupling from Equities and the Dollar

Analysts debate whether Bitcoin is decoupling from equities, with recent trends suggesting potential decoupling linked to U.S. dollar weakness. Bitcoin recently traded at approx. $93,000, up 7% in one day, while equities declined. Its historical correlation with stocks remains significant, indicating that any observed trend may not be sustainable long-term.

Analysts express caution regarding Bitcoin’s potential decoupling from equity markets, suggesting it may be premature to consider this a lasting trend. Recently, Bitcoin demonstrated substantial growth, trading at approximately $93,000, marking a 7% increase within a day. The cryptocurrency’s price surge coincided with comments from U.S. Treasury Secretary Bessent regarding the unsustainable nature of tariffs between Washington and Beijing.

Bitcoin’s price movement diverged from that of traditional equities, as the S&P 500 and Nasdaq experienced declines while Bitcoin and gold rose. This difference arose in part after U.S. dollar weakness emerged late in the previous week, prompted by President Trump exerting pressure on the Federal Reserve to lower interest rates. Analysts now plan to closely monitor the U.S. Dollar Index (DXY) to assess the implications of USD fluctuations on Bitcoin’s behaviour.

Historically, Bitcoin has shown a strong correlation with equities, especially during macroeconomic sell-offs. Recently, this 30-day correlation with the S&P 500 sat at 0.65, indicating a substantial relationship remains. In light of Trump’s aggressive trade tactics that dampen risk assets, Bitcoin’s position between gold and the S&P 500 suggests a shift in investor perception, with potential implications for its future behaviour in the markets.

David Duong, from Coinbase Institutional, highlights that concerns over U.S. dollar debasement, arising from unsustainable debt patterns and pressure on Fed leadership, are influencing Bitcoin’s recent performance. Despite these observations, he advocates for cautious optimism, emphasizing that long-term trends cannot yet be confirmed. Duong notes, “We would need to observe consistent behaviour across different market conditions to assert that Bitcoin has truly decoupled from traditional assets.”