Bitcoin The recent trend of moving at the same pace as US stocks does not erase its value as a portfolio diversifier.
That’s according to financial services and infrastructure company NYDIG. In a weekly market note, Greg Cipolaro, the company’s global head of research, said correlations between bitcoin and stock benchmarks such as the S&P 500, Nasdaq 100 and the software-heavy IGV ETF have increased in recent months.
The change has led some market observers to argue that the cryptocurrency is now trading as a substitute for technology stocks. But Cipolaro disputes that view.
Even with correlations close to 0.5, stocks explain only a small part of bitcoin’s movements, Cipolaro wrote. Statistically, that level means that about a quarter of price changes are driven by stock market factors, leaving the remaining three-quarters tied to forces unique to the cryptocurrency market.
Those forces include capital flows into bitcoin funds, changes in derivatives positioning, network adoption trends, and regulatory developments.
Cipolaro said the recent price alignment likely reflects the current macroeconomic context rather than a structural merger between asset classes. Both bitcoin and growth stocks respond to liquidity conditions and investors’ risk appetite.
“That differentiation supports bitcoin’s role as a portfolio diversifier,” Cipolaro wrote. “While correlations between assets and stocks are currently high, they remain far from being decisive for bitcoin returns.”
The evolving role of Bitcoin
The NYDIG note also referred to recent comments from prominent investors. Chamath Palihapitiya and Ray Dalio have sparked debate over whether early defenders have turned against the asset. Cipolaro argued instead that the debate has shifted from whether bitcoin could survive to whether it could serve as a reserve asset for central banks.
Palihapitiya, an early supporter who in 2013 called bitcoin “Gold 2.0,” recently questioned whether the asset fits the needs of sovereign balance sheets.
Dalio has raised similar concerns for years, pointing to volatility, regulatory risk and long-term technological threats, such as advances in quantum computing.
Cipolaro said these criticisms reflect changing expectations as bitcoin transitions from a retail asset to one held by institutions. Still, he argued that bitcoin’s long-term growth does not depend on central bank adoption.
Instead, the network has expanded from individual users to family offices, asset managers and exchange-traded funds, a path that differs from many past financial innovations, which began with institutional capital.
Central bank ownership may ultimately further validate the asset class, but is not a prerequisite for continued growth,” Cipolaro wrote.
“Bitcoin’s value comes from its globally distributed network, political neutrality, and technical and economic properties that enable censorship-resistant transfer of value, digital scarcity, and independent operation free from any government, institution, or monetary authority,” the note concludes.
Read more: Crypto bulls slam Ray Dalio’s ‘tired narratives’ in defense of bitcoin’s future
