Bitcoin just hit a decade-low S&P 500 correlation, but the daily data tells a different story

What happened

Bitcoin's correlation with the S&P 500 has hit a decade-low according to Bitwise's negative trend measure, but daily data from a FRED proxy shows a positive return correlation, meaning the two metrics disagree.

Confirmed

Global impact / market context

For investors, a low correlation means Bitcoin's price moves independently from stocks, which could help diversify a portfolio. However, the conflicting daily data suggests that this independence may not be reliable, affecting how investors use Bitcoin to balance risk.

Analyst inference

The disagreement between trend and daily correlation measures indicates that Bitcoin's relationship with the stock market is unstable. This matters because portfolio results change depending on the time period analyzed, so investors should be cautious about assuming Bitcoin will always act as a hedge.

Analyst inference

What to watch

1. Watch for updates from Bitwise on their correlation measure, as the article confirms their negative trend measure is at a decade-low, which may signal a shift in Bitcoin's market behavior. Confirmed
2. Investors could monitor the FRED proxy daily correlation data, since the article shows it is positive, suggesting that short-term price movements may still track stocks despite the long-term trend. Proposed
3. Watch how portfolio results change across different lookback periods, as the article implies that the choice of time frame can alter the apparent benefit of holding Bitcoin alongside stocks. Analyst inference

Affected assets

• BTC — Bitcoin

Evidence

• cryptoslate.com