Traders who watched Bitcoin rise alongside U.S. software stocks last week may have drawn the wrong conclusion. According to NYDIG, a Bitcoin-focused financial services company, the visual similarities are misleading.
Only about 25% of BTC’s price movements can be traced back to its relationship with the stock market. The remaining 75% is driven by forces that have nothing to do with the S&P 500 or Nasdaq.
NYDIG Director of Investigations Greg Cipolaro made the claim in a memo Friday. His argument: Bitcoin and software stocks move in the same direction not because they are structurally linked. Both are responding to the same macro pressures, those that push investors toward or away from risky assets.
“The conclusion that Bitcoin and software stocks have structurally converged is overstated,” Cipolaro wrote.
Shared macro triggers instead of common identity
The 90-day rolling correlation between Bitcoin and software stocks has been rising since Bitcoin hit a record above $126,000 in early October. However, Cipolaro pointed out that correlations with the S&P 500 and Nasdaq have also increased at the same time.
90-Day Rolling Correlation Between Bitcoin and Major Indices. Source: NYDIG
Liquidity sensitive assets
This pattern suggests that this shift is not unique to software stocks, but a broader phenomenon related to investors’ risk appetite.
According to the data, both Alpha crypto assets and software stocks are treated as long-term liquidity-sensitive assets. Both rise when macro conditions favor risk-taking. Otherwise, you will both be attacked.
A shared sensitivity to financial conditions is driving the parallel movement, not a deep connection between the two.
Image: CoinFlip.tech
The theory that “Bitcoin is a tech stock” has been popularized before. This issue tends to resurface during times when correlations are high and assets appear to be moving in lockstep. Cipolaro’s memo pushes directly back against that framework.
A unique driver that puts cryptocurrencies in a category of their own
Despite the high correlation, NYDIG claims that Bitcoin has a unique market structure. Network activity, adoption trends, and policy developments all shape that price in ways that are not true for software companies.
Cipolaro said these factors support Bitcoin’s role as a portfolio diversifier, even as the correlation between assets increases.
BTCUSD trading at $67,465 on the 24-hour chart: TradingView
One of the tensions the note acknowledges is that Bitcoin cannot be traded like gold. It has long been called “digital gold,” but reports suggest it is not being bought as a hedge against economic uncertainty.
Traders appear to be investing along a risk curve rather than out of a clear financial belief.
Currently, the correlation with stocks is increasing. However, NYDIG’s analysis shows that it is far from a complete picture of what drives Bitcoin’s price, and it is far from calling Bitcoin a software stock.
Featured images are from ION, charts are from TradingView
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