According to financial services firm NYDIG, Bitcoin’s recent parallel move with US software stocks is more a case of mutual exposure to macro events than any structural convergence.
Over the past week, Bitcoin (BTC) has rallied alongside U.S. software stocks, with many arguing that the cryptocurrency was a proxy for the sector, NYDIG head of research Greg Cipolaro said in a note on Friday.
“While the visual consistency of their indexed prices is interesting, the conclusion that Bitcoin and software stocks are structurally integrated or that they share common themes such as AI or quantum risk is overstated,” he said.
Cipolaro added that the tandem rally “rather than evidence of structural convergence between Bitcoin and software stocks, more reliably reflects the mutual influence on the current macro regime, especially long-term liquidity-sensitive assets.”
Bitcoin price ‘not explained by stocks’
Bitcoin’s correlation with software stocks has risen over a 90-day period since hitting $126,000 in early October, but Cipolaro said its correlations with the S&P 500 and Nasdaq have also increased recently, suggesting that “changes are not isolated to software stocks.”
However, even with Bitcoin’s correlation with software stocks and the two indices, “much of Bitcoin’s price movement remains unexplained by stocks,” Cipolaro added.
He said that measured statistically, only a quarter of Bitcoin’s price movement can be explained by correlation to the stock market, while at least 75% of its movement is influenced by drivers outside of traditional stock indices.
Cipolaro said that it appears that Bitcoin is not being priced as a hedge against macroeconomic conditions, which “explains the continued frustration over Bitcoin’s failure to ‘act like gold’ despite the digital gold label.”
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He added that traders appear to be allocating risk to assets on the curve rather than buying bitcoin for a “specific monetary proposition.”
However, Cipolaro argued that Bitcoin has a specific market structure and economic drivers that point to network activity and adoption trends, along with regulatory and policy developments, that differentiate it from other assets.
“This difference supports bitcoin’s role as a portfolio diversifier,” he said. “Although asset-to-equity correlations are currently high, they remain far from a determinant of bitcoin’s returns.”
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