Key Points
- Bitcoin [BTC] decoupled from U.S stocks, rallying by 5% over five trading days, while the S&P 500 Index fell by 5%.
- Bitcoin began behaving as a ‘risk-off asset’ or ‘safe haven’ trade from mid-April, correlating positively with gold.
Bitcoin [BTC] showed a significant shift last week, decoupling from U.S stocks and maintaining the trend this week.
In the last five trading days, the cryptocurrency has seen a 5% rally, even reaching $90k during Tuesday’s early morning trading session.
A Major Shift
Interestingly, this hasn’t always been the case.
Since February, BTC has been moving along with U.S equities as a risk-on asset.
However, from 15 April, BTC decoupled from the S&P 500 and the Nasdaq Composite.
It started to correlate positively with gold, suggesting it began behaving as a ‘risk-off asset’ or ‘safe haven’ trade from mid-April.
In a recent CNBC interview, market analyst and FundStrat CIO Tom Lee said, “BTC is going to catch up to gold. Its ATH was over $100K. There’s room to catch up as a non-dollar asset.”
He noted that the recent de-leveraging of U.S dollar-based assets (sell-off) was over and could boost BTC going forward.
Bitcoin’s Decoupling Trend
For Galaxy Digital’s Head of Research Alex Thorn, Bitcoin’s decoupling trend from U.S stocks is remarkable.
However, he warned that it wouldn’t last.
The sustained sell-off in the U.S dollar and U.S stocks has been driven by ongoing threats by President Donald Trump to fire Fed chair Jerome Powell for being “too late” to cut interest rates.
Most analysts view Trump’s move as a breach of Fed independence.
This has dented confidence and sparked a mass investor exodus from U.S markets to gold, BTC, and other markets.
For its part, Gold knocked a new all-time high of $3.5k per ounce and BTC pumped harder.
In 2025 so far, Bitcoin has lagged behind gold and shed over 35% of its value.
Whether the renewed ‘safe haven’ trade will tip it to regain lost ground against gold remains to be seen.
