Bitcoin's Anti-Establishment Days End As Wall Street Takes Over

HomeNews* Wall Street institutions now play a major role in the Bitcoin market, reducing its independence from traditional finance.

• Bitcoin’s price movements have become closely linked to those of U.S. equities, with a current correlation value of 0.48, according to NYDIG Research.
• The cryptocurrency no longer displays strong traits of being “digital Gold,” as its correlation with both physical gold and the U.S. dollar remains near zero.
• Key macroeconomic policies, geopolitical tensions, and news events directly influence bitcoin’s value alongside other risk assets.
• Despite this shift, bitcoin’s original features—limited supply, global access, and decentralization—remain unchanged, although they do not currently drive its price action. Bitcoin’s core mission of being a decentralized, censorship-resistant asset has evolved as major financial firms and political entities increase their involvement in the digital currency space. As of 2024, large institutions from the traditional financial sector, often referred to as Wall Street, have a solid presence in the bitcoin market.

• Advertisement - Recent data from NYDIG Research shows that bitcoin’s correlation with U.S. equities remains significant, closing the last quarter at 0.48—near the upper historical limit. This means bitcoin performs more like a typical stock and less like an independent asset.

“Bitcoin, once celebrated for its low correlation to mainstream financial assets, has increasingly exhibited sensitivity to the same variables that drive equity markets over short time frames,” NYDIG Research stated. The report noted that central bank policies and geopolitical tensions have impacted investor sentiment, causing digital assets like bitcoin to behave as risk assets over short and medium periods.

Bitcoin’s original appeal included its low resemblance to stocks or commodities like gold. During the 2013 Cyprus banking crisis—when 47.5% of uninsured bank deposits over 100,000 euros (about $108,000 at current conversion) were seized (source)—bitcoin’s price surged past $1,000 for the first time. Historically, this anti-establishment character set it apart from the S&P 500 and other indexes.

However, the correlation between bitcoin and traditional safe-haven assets has faded. “Bitcoin’s correlation to physical gold and the U.S. dollar is near zero. So much for the ‘hedge’ argument—at least for now.” NYDIG highlighted that these traits are unlikely to change as long as markets remain focused on macro and geopolitical headlines.

For now, investors largely treat bitcoin as another ticker on the stock exchange. Core technical elements such as decentralized control and fixed supply are intact, but they have little impact on daily price trends.

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