Bitcoin was designed as an alternative to the financial system. For its first decade it traded largely apart from it. Since 2020 that has changed: Bitcoin has become one of the most sensitive instruments in the world to the same thing that drives technology stocks — the appetite for risk — and for long stretches its chart and the Nasdaq's are hard to tell apart.
What the numbers show
Correlation runs from −1 (perfect opposites) through 0 (no relationship) to +1 (perfect lockstep). Measured over rolling 90-day windows since 2020, the correlation between Bitcoin and the Nasdaq 100 has spent most of its time between +0.3 and +0.7, with peaks above +0.8 during the 2022 rate-hike sell-off and troughs near zero during a few crypto-specific episodes. For comparison, gold's correlation with the Nasdaq over the same period has hovered near zero.
In plain terms: on a day when the Nasdaq falls 3%, Bitcoin is more likely than not to fall too, and usually by more. On a day when the Nasdaq rallies, Bitcoin usually joins it. The "digital gold" idea — that Bitcoin rises when stocks fall — has not been what the market delivered.
Why the link exists
Three mechanisms, all of them about who owns Bitcoin now:
- The same buyers. Since 2020, hedge funds, family offices and — after the 2024 launch of spot Bitcoin funds — mainstream asset managers hold it alongside tech stocks. When those investors reduce risk, they sell both.
- The same driver. Both are "long-duration" assets whose value rests on the future rather than on current cash flow. Both fall when interest rates rise and rise when they fall. The 2022 Fed tightening cycle hit both hard for the same reason.
- Leverage. Crypto exchanges offer very high leverage. When stocks fall and margin calls arrive, leveraged crypto positions are among the first to be liquidated, which amplifies Bitcoin's fall relative to the index.
When the link breaks
The correlation drops toward zero when the news is about crypto rather than about risk generally:
- Exchange failures and frauds (2022's collapses) — Bitcoin fell while stocks were calm.
- Regulatory decisions specific to crypto — fund approvals, court rulings.
- Halving-cycle dynamics and large holder movements.
It also loosens in quiet periods when neither market is trending. But it has rarely turned meaningfully negative. There have been very few months since 2020 in which Bitcoin rose while the Nasdaq fell substantially.
Bitcoin as a higher-beta Nasdaq
A useful mental model is that Bitcoin behaves like a leveraged version of the tech index: same direction, two to three times the magnitude. A 10% Nasdaq correction has tended to come with a 20–30% Bitcoin drawdown. That is why Bitcoin's drawdowns are so much deeper than equities' despite following the same rhythm.
What it means for a mixed set of copies
Suppose you follow three masters: one in Bitcoin, one in the NAS100 index, one in EUR/USD. You may feel diversified across asset classes. In a risk-off week the first two fall together, and the third may fall too if the dollar strengthens on the same fear. What looks like three positions is closer to one-and-a-half.
A better spread, if diversification is the goal, is a Bitcoin master alongside a gold master. Gold's near-zero correlation with the Nasdaq means it rarely falls on the same day for the same reason. It will not always rise when Bitcoin falls — but it will not reliably fall with it either, which is what diversification actually means.
Does this change?
Possibly. If Bitcoin were to become mainly a reserve asset held by governments and central banks, as some expect, its behaviour could migrate toward gold's. There were hints of that in some 2025 episodes where Bitcoin held up during equity wobbles. But three months of decoupling is not a regime change, and the base case for a copier today remains: Bitcoin is a risk asset, and a Bitcoin copy is not insurance against a stock-market fall.
Correlation by regime
A finer reading splits the last few years into regimes. In the 2022 tightening cycle, with rates rising fast, the correlation was at its highest — both assets were being repriced by the same discount-rate shock. In the 2023–2024 recovery it loosened, as crypto-specific catalysts (fund approvals, the halving) drove Bitcoin on days the Nasdaq was quiet. In risk shocks of any year it snaps back to near +0.8 within days. The pattern is that fear unites the two and optimism lets them drift apart. For a copier that reduces to a single expectation: in a calm rising market your Bitcoin and index copies may diverge; in a sell-off they will fall together, and the Bitcoin one will fall further.
A practical check
Once a month, look at a Bitcoin chart and a Nasdaq chart side by side over the last 90 days. If the shapes match, you are in the normal regime and your crypto copy is a leveraged bet on risk appetite. If they have diverged, something crypto-specific is happening and it is worth reading what. Ten minutes, and you will never mistake a Bitcoin position for a hedge again.
Bitcoin has traded like a leveraged tech stock since 2020. The link breaks on crypto-specific news and rarely reverses. For diversification, pair it with gold, not with an index.
This article is education, not investment advice. Trading and copy trading in leveraged instruments carry a high risk of losing the funds you allocate. Read the Risk Disclosure.