Key Takeaways:

• Bitcoin’s correlations with stocks and gold have recently dropped to near-zero levels, suggesting a decoupling phase from traditional assets—typically observed during major market catalysts or shocks.

• While Bitcoin exhibits low correlation with interest rates, shifts in monetary policy still influence its performance. During the 2022–2023 tightening cycle, Bitcoin showed strong negative correlation with rate hikes.

• Despite its "digital gold" moniker, Bitcoin historically displays higher beta and stronger upside sensitivity relative to stocks, especially during optimistic macroeconomic conditions.

• Since 2021, Bitcoin’s volatility has steadily declined, aligning its risk profile more closely with hot tech stocks, reflecting a maturing risk signature.

Introduction
Is Bitcoin decoupling from broader markets? Recent outperformance relative to gold and stocks has reignited this debate. Over its 16-year history, Bitcoin has been labeled everything from "digital gold" and a "store of value" to a "risk-on asset." But does it truly embody these traits? Is Bitcoin a distinct investment asset, or merely a leveraged expression of existing market risks?

In this edition of the Coin Metrics State of the Network Report, we explore Bitcoin’s performance across market regimes, analyzing catalysts and conditions behind periods of low correlation with traditional assets like stocks and gold. We also examine how shifts in monetary policy regimes affect Bitcoin’s behavior, assess its sensitivity to broader markets, and profile its volatility characteristics relative to other major assets.

Bitcoin Across Interest Rate Regimes
The Federal Reserve is one of the most influential forces in financial markets due to its control over interest rates. Changes in the federal funds rate, whether tightening or easing, directly impact money supply, market liquidity, and investor risk appetite. Over the past decade, we’ve transitioned from a zero-interest-rate era to unprecedented pandemic-era monetary easing and then to aggressive rate hikes in 2022 to combat rising inflation.

To gauge Bitcoin’s sensitivity to monetary policy shifts, we segment its history into five key interest rate regime phases, considering both direction and level of rates (ranging from dovish—below 2% federal funds rate—to hawkish—above 2%). Since interest rate changes are infrequent, we compare Bitcoin’s monthly returns to monthly changes in the federal funds rate.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?
Source: Coin Metrics and Federal Reserve Bank of New York

While Bitcoin’s correlation with rate changes is generally low and clustered around neutral levels, distinct patterns emerge during regime shifts:

• Dovish + Zero Rates (2010–2015): Spurred by post-2008 financial crisis zero-rate policies, Bitcoin achieved its highest returns. Correlation with rates was broadly neutral, aligning with Bitcoin’s early growth phase.

• Dovish + Rate Hikes (2015–2018): As the Fed began raising rates toward 2%, Bitcoin’s returns oscillated. While correlations spiked in 2017, they remained low overall, suggesting partial detachment from macro policies.

• Dovish + Rate Cuts (2018–2022): Aggressive rate cuts and fiscal stimulus in response to COVID-19, followed by two years of near-zero rates, drove volatile but predominantly positive Bitcoin returns. Correlations swung wildly, from below -0.3 in 2019 to +0.59 in 2021 before reverting to neutrality.

• Hawkish + Rate Hikes (2022–2023): To combat soaring inflation, the Fed enacted one of its fastest rate-hiking cycles, pushing the federal funds rate above 5%. Bitcoin exhibited strong negative correlation with rate changes, underperforming amid risk-off sentiment and crypto-specific shocks like FTX’s November 2022 collapse.

• Hawkish + Rate Cuts (2023–Present): With three "higher-for-longer" rate cuts completed, Bitcoin’s performance has ranged from neutral to moderately positive. Catalysts like the U.S. presidential election and trade wars have continued shaping its trajectory. Correlations remain negative but appear to converge toward zero, suggesting a transitional phase as macroeconomic conditions ease.

While interest rates set the market backdrop, Bitcoin’s performance relative to stocks and gold better illuminates its behavior versus major asset classes.

Bitcoin Returns vs. Gold and Stocks
Correlation Analysis
The most straightforward way to assess decoupling is to examine return correlations. Below is a chart of Bitcoin’s 90-day rolling correlations with the S&P 500 and gold.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?
Source: Coin Metrics

Indeed, Bitcoin’s correlations with gold and stocks have historically been low. Bitcoin’s returns typically oscillate between correlations with gold or stocks, with gold correlations generally higher. Notably, Bitcoin’s correlation with the S&P 500 rose in 2025 amid heightened market sentiment. However, since roughly February 2025, Bitcoin’s correlations with both gold and stocks have trended toward zero, indicating a unique "decoupling" phase from both assets—a scenario not observed since the previous cycle’s peak in late 2021.

What typically happens during such low-correlation periods? We compiled intervals where Bitcoin’s rolling 90-day correlations with the S&P 500 and gold fell below a significant threshold (~0.15), noting the most salient events at the time.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?

Low-Correlation Periods with S&P 500
Data Validation: Is Bitcoin Decoupling from Traditional Markets?

Low-Correlation Periods with Gold
Unsurprisingly, past Bitcoin decouplings occurred during crypto-specific shocks like China’s Bitcoin ban or approval of spot Bitcoin ETFs. Historically, low-correlation periods last ~2–3 months, though this depends on the correlation threshold used.

These periods have coincided with modest positive returns, but each interval’s uniqueness warrants caution before drawing conclusions about Bitcoin’s recent behavior. Nonetheless, Bitcoin’s recent low correlation with other assets is ideal for investors seeking significant allocations in risk-diversified portfolios.

Market Beta Analysis
Beyond correlation, market beta is another useful metric for measuring an asset’s return sensitivity to market movements. Beta quantifies how much an asset’s returns are expected to move relative to market returns, calculated as the sensitivity of the asset’s excess returns (returns minus the risk-free rate) to a benchmark. While correlation measures the direction and strength of linear relationships between an asset and a benchmark, beta measures the direction and magnitude of sensitivity to market volatility.

For example, Bitcoin is often said to trade with "high beta" versus the stock market. Specifically, if an asset (like Bitcoin) has a beta of 1.5, a 1% move in the benchmark (S&P 500) would imply a 1.5% move in the asset’s returns. Negative beta implies inverse returns versus the benchmark.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?

For much of 2024, Bitcoin’s beta versus the S&P 500 was well above 1, indicating high sensitivity to stock market volatility. Investors holding Bitcoin alongside the S&P 500 enjoyed outsized returns during optimistic, risk-on environments. Despite its "digital gold" label, Bitcoin’s low beta versus physical gold suggests holding both assets hedges against downside risks in each.

As we enter 2025, Bitcoin’s beta versus the S&P 500 and gold has begun declining. While Bitcoin’s dependence on these assets is waning, it remains sensitive to market risks, and its returns are still correlated with market returns. Bitcoin may be evolving into a unique asset class, but it still trades largely like a risk-on asset, with no strong evidence yet of becoming a "safe haven."

Bitcoin Performance During High-Volatility Periods
Realized volatility provides another dimension for understanding Bitcoin’s risk profile, measuring the magnitude of price fluctuations over time. Volatility is often regarded as a core Bitcoin trait, serving as both a risk driver and a return source. Below is a chart comparing Bitcoin’s 180-day rolling realized volatility with indices like the Nasdaq, S&P 500, and select tech stocks.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?
Source: Coin Metrics and Google Finance

Bitcoin’s volatility has trended downward over time. In its early days, driven by massive price rallies and pullbacks, realized volatility often exceeded 80%–100%. During COVID-19, Bitcoin’s volatility rose alongside stocks and independently during crypto-specific shocks like Luna’s and FTX’s collapses in 2021–2022.

However, since 2021, Bitcoin’s 180-day realized volatility has steadily declined, recently stabilizing around 50%–60% even amid higher market volatility. This aligns its volatility with many popular tech stocks, below MicroStrategy (MSTR) and Tesla (TSLA) and very close to NVIDIA’s volatility. While Bitcoin remains vulnerable to short-term market swings, its relative stability versus past cycles may reflect maturation as an asset.

Conclusion
Has Bitcoin decoupled from the rest of the market? It depends on how you measure. Bitcoin is not entirely immune to real-world influences. It remains subject to market forces affecting all assets: interest rates, specific market events, and returns of other financial instruments. Recently, we’ve observed Bitcoin’s returns dissociating from broader markets, but whether this is a temporary trend or part of a longer-term market shift remains to be seen.

Bitcoin’s decoupling raises a broader question: What role does Bitcoin play in a risk-diversified portfolio? Its risk-return profile may confuse investors, behaving one week like a leveraged Nasdaq, another like digital gold, and another as a hedge against fiat currency devaluation. But perhaps this volatility is a feature, not a flaw. Instead of imperfect analogies to other assets, a more constructive approach is to understand why Bitcoin charts its own course as it evolves into a distinct asset class.

Key Takeaways:

• Bitcoin’s correlations with stocks and gold have recently dropped to near-zero levels, suggesting a decoupling phase from traditional assets—typically observed during major market catalysts or shocks.

• While Bitcoin exhibits low correlation with interest rates, shifts in monetary policy still influence its performance. During the 2022–2023 tightening cycle, Bitcoin showed strong negative correlation with rate hikes.

• Despite its "digital gold" moniker, Bitcoin historically displays higher beta and stronger upside sensitivity relative to stocks, especially during optimistic macroeconomic conditions.

• Since 2021, Bitcoin’s volatility has steadily declined, aligning its risk profile more closely with hot tech stocks, reflecting a maturing risk signature.

Introduction
Is Bitcoin decoupling from broader markets? Recent outperformance relative to gold and stocks has reignited this debate. Over its 16-year history, Bitcoin has been labeled everything from "digital gold" and a "store of value" to a "risk-on asset." But does it truly embody these traits? Is Bitcoin a distinct investment asset, or merely a leveraged expression of existing market risks?

In this edition of the Coin Metrics State of the Network Report, we explore Bitcoin’s performance across market regimes, analyzing catalysts and conditions behind periods of low correlation with traditional assets like stocks and gold. We also examine how shifts in monetary policy regimes affect Bitcoin’s behavior, assess its sensitivity to broader markets, and profile its volatility characteristics relative to other major assets.

Bitcoin Across Interest Rate Regimes
The Federal Reserve is one of the most influential forces in financial markets due to its control over interest rates. Changes in the federal funds rate, whether tightening or easing, directly impact money supply, market liquidity, and investor risk appetite. Over the past decade, we’ve transitioned from a zero-interest-rate era to unprecedented pandemic-era monetary easing and then to aggressive rate hikes in 2022 to combat rising inflation.

To gauge Bitcoin’s sensitivity to monetary policy shifts, we segment its history into five key interest rate regime phases, considering both direction and level of rates (ranging from dovish—below 2% federal funds rate—to hawkish—above 2%). Since interest rate changes are infrequent, we compare Bitcoin’s monthly returns to monthly changes in the federal funds rate.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?
Source: Coin Metrics and Federal Reserve Bank of New York

While Bitcoin’s correlation with rate changes is generally low and clustered around neutral levels, distinct patterns emerge during regime shifts:

• Dovish + Zero Rates (2010–2015): Spurred by post-2008 financial crisis zero-rate policies, Bitcoin achieved its highest returns. Correlation with rates was broadly neutral, aligning with Bitcoin’s early growth phase.

• Dovish + Rate Hikes (2015–2018): As the Fed began raising rates toward 2%, Bitcoin’s returns oscillated. While correlations spiked in 2017, they remained low overall, suggesting partial detachment from macro policies.

• Dovish + Rate Cuts (2018–2022): Aggressive rate cuts and fiscal stimulus in response to COVID-19, followed by two years of near-zero rates, drove volatile but predominantly positive Bitcoin returns. Correlations swung wildly, from below -0.3 in 2019 to +0.59 in 2021 before reverting to neutrality.

• Hawkish + Rate Hikes (2022–2023): To combat soaring inflation, the Fed enacted one of its fastest rate-hiking cycles, pushing the federal funds rate above 5%. Bitcoin exhibited strong negative correlation with rate changes, underperforming amid risk-off sentiment and crypto-specific shocks like FTX’s November 2022 collapse.

• Hawkish + Rate Cuts (2023–Present): With three "higher-for-longer" rate cuts completed, Bitcoin’s performance has ranged from neutral to moderately positive. Catalysts like the U.S. presidential election and trade wars have continued shaping its trajectory. Correlations remain negative but appear to converge toward zero, suggesting a transitional phase as macroeconomic conditions ease.

While interest rates set the market backdrop, Bitcoin’s performance relative to stocks and gold better illuminates its behavior versus major asset classes.

Bitcoin Returns vs. Gold and Stocks
Correlation Analysis
The most straightforward way to assess decoupling is to examine return correlations. Below is a chart of Bitcoin’s 90-day rolling correlations with the S&P 500 and gold.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?
Source: Coin Metrics

Indeed, Bitcoin’s correlations with gold and stocks have historically been low. Bitcoin’s returns typically oscillate between correlations with gold or stocks, with gold correlations generally higher. Notably, Bitcoin’s correlation with the S&P 500 rose in 2025 amid heightened market sentiment. However, since roughly February 2025, Bitcoin’s correlations with both gold and stocks have trended toward zero, indicating a unique "decoupling" phase from both assets—a scenario not observed since the previous cycle’s peak in late 2021.

What typically happens during such low-correlation periods? We compiled intervals where Bitcoin’s rolling 90-day correlations with the S&P 500 and gold fell below a significant threshold (~0.15), noting the most salient events at the time.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?

Low-Correlation Periods with S&P 500
Data Validation: Is Bitcoin Decoupling from Traditional Markets?

Low-Correlation Periods with Gold
Unsurprisingly, past Bitcoin decouplings occurred during crypto-specific shocks like China’s Bitcoin ban or approval of spot Bitcoin ETFs. Historically, low-correlation periods last ~2–3 months, though this depends on the correlation threshold used.

These periods have coincided with modest positive returns, but each interval’s uniqueness warrants caution before drawing conclusions about Bitcoin’s recent behavior. Nonetheless, Bitcoin’s recent low correlation with other assets is ideal for investors seeking significant allocations in risk-diversified portfolios.

Market Beta Analysis
Beyond correlation, market beta is another useful metric for measuring an asset’s return sensitivity to market movements. Beta quantifies how much an asset’s returns are expected to move relative to market returns, calculated as the sensitivity of the asset’s excess returns (returns minus the risk-free rate) to a benchmark. While correlation measures the direction and strength of linear relationships between an asset and a benchmark, beta measures the direction and magnitude of sensitivity to market volatility.

For example, Bitcoin is often said to trade with "high beta" versus the stock market. Specifically, if an asset (like Bitcoin) has a beta of 1.5, a 1% move in the benchmark (S&P 500) would imply a 1.5% move in the asset’s returns. Negative beta implies inverse returns versus the benchmark.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?

For much of 2024, Bitcoin’s beta versus the S&P 500 was well above 1, indicating high sensitivity to stock market volatility. Investors holding Bitcoin alongside the S&P 500 enjoyed outsized returns during optimistic, risk-on environments. Despite its "digital gold" label, Bitcoin’s low beta versus physical gold suggests holding both assets hedges against downside risks in each.

As we enter 2025, Bitcoin’s beta versus the S&P 500 and gold has begun declining. While Bitcoin’s dependence on these assets is waning, it remains sensitive to market risks, and its returns are still correlated with market returns. Bitcoin may be evolving into a unique asset class, but it still trades largely like a risk-on asset, with no strong evidence yet of becoming a "safe haven."

Bitcoin Performance During High-Volatility Periods
Realized volatility provides another dimension for understanding Bitcoin’s risk profile, measuring the magnitude of price fluctuations over time. Volatility is often regarded as a core Bitcoin trait, serving as both a risk driver and a return source. Below is a chart comparing Bitcoin’s 180-day rolling realized volatility with indices like the Nasdaq, S&P 500, and select tech stocks.

Data Validation: Is Bitcoin Decoupling from Traditional Markets?
Source: Coin Metrics and Google Finance

Bitcoin’s volatility has trended downward over time. In its early days, driven by massive price rallies and pullbacks, realized volatility often exceeded 80%–100%. During COVID-19, Bitcoin’s volatility rose alongside stocks and independently during crypto-specific shocks like Luna’s and FTX’s collapses in 2021–2022.

However, since 2021, Bitcoin’s 180-day realized volatility has steadily declined, recently stabilizing around 50%–60% even amid higher market volatility. This aligns its volatility with many popular tech stocks, below MicroStrategy (MSTR) and Tesla (TSLA) and very close to NVIDIA’s volatility. While Bitcoin remains vulnerable to short-term market swings, its relative stability versus past cycles may reflect maturation as an asset.

Conclusion
Has Bitcoin decoupled from the rest of the market? It depends on how you measure. Bitcoin is not entirely immune to real-world influences. It remains subject to market forces affecting all assets: interest rates, specific market events, and returns of other financial instruments. Recently, we’ve observed Bitcoin’s returns dissociating from broader markets, but whether this is a temporary trend or part of a longer-term market shift remains to be seen.

Bitcoin’s decoupling raises a broader question: What role does Bitcoin play in a risk-diversified portfolio? Its risk-return profile may confuse investors, behaving one week like a leveraged Nasdaq, another like digital gold, and another as a hedge against fiat currency devaluation. But perhaps this volatility is a feature, not a flaw. Instead of imperfect analogies to other assets, a more constructive approach is to understand why Bitcoin charts its own course as it evolves into a distinct asset class.