Financial media often highlight Bitcoin's (BTC) correlation with major tech stocks. Phrases like "Bitcoin trades like a tech stock" are common, while BTC also exhibits a strong inverse relationship with the U.S. dollar. But are these correlations static? Do they help predict future price movements? Let’s analyze reports examining Bitcoin’s ties to various asset classes.
Bitcoin’s Historical Correlations Vary by Timeframe
A 2022 report by the Multidisciplinary Digital Publishing Institute revealed key insights:
- Long-term correlations outweigh short-term due to Bitcoin’s volatility.
- Positive correlations with risk assets intensify during extreme shocks (e.g., COVID-19).
- BTC can correlate positively with risk assets and negatively with the dollar.
- Bitcoin may serve as a hedge against dollar depreciation.
While recent data (e.g., reduced volatility) challenges some findings, these patterns offer valuable context. Below, we explore three asset classes with the strongest Bitcoin ties.
1. Crypto-Linked Stocks
Certain equities mirror Bitcoin’s movements more closely than other assets. Key examples:
| Stock | Ticker | BTC Held | 90-Day Correlation (Peak) |
|---|---|---|---|
| MicroStrategy | MSTR | 152,333 BTC | ~1.0 |
| Coinbase | COIN | 10,766 BTC | ~1.0 |
| Riot Platforms | RIOT | 7,094 BTC | ~1.0 |
Why the strong correlation? These companies hold significant BTC reserves, making their stock prices inherently tied to Bitcoin’s performance. Investors often use them as proxies for BTC exposure in traditional brokerage accounts.
2. Precious Metals (Silver > Gold)
Silver has outperformed gold in reflecting Bitcoin’s price trends since 2019.
- Silver-BTC correlation: 0.26 (2019–2022)
- Gold-BTC correlation: 0.15
👉 Why silver’s volatility aligns closer to crypto
Silver’s higher beta and industrial demand may explain this dynamic, whereas gold’s stability weakens its responsiveness to crypto movements.
3. Growth-Oriented Equity Funds
Passive and active growth funds show stronger crypto ties than value funds:
- Small-cap growth funds: 0.41 correlation with BTC
- Small-cap value funds: 0.35 correlation
Key driver: Growth stocks’ speculative nature aligns with crypto’s risk-reward profile. Conversely, bonds exhibit minimal BTC correlation (~0.11–0.13).
FAQs
Q: Do Bitcoin correlations predict future prices?
A: No. Correlations are retrospective and can shift abruptly due to BTC’s volatility.
Q: Why do crypto stocks like MSTR correlate so strongly?
A: Their balance sheets are BTC-heavy—price movements directly impact valuations.
Q: Is Bitcoin truly "digital gold"?
A: Data suggests silver’s correlation is stronger, challenging this narrative.
Key Takeaways
- Crypto stocks (MSTR, COIN, RIOT) are prime BTC proxies due to their holdings.
- Silver outpaces gold in tracking Bitcoin’s volatility.
- Growth funds mirror crypto’s speculative trends more than value funds.
👉 Explore crypto-linked investment strategies
Note: Correlations are dynamic—monitor real-time data for updated insights.