Bitcoin recent tendency to move in step with American stocks does not erase its value as a portfolio diversifier.
This is according to financial services and infrastructure company NYDIG. In a weekly market note, Greg Cipolaro, the firm’s global head of research, said correlations between bitcoin and stock indexes such as the S&P 500, Nasdaq 100 and the software-heavy IGV ETF have increased in recent months.
This change has led some market observers to claim that the cryptocurrency now trades as a proxy for technology stocks. But Cipolaro disputes this view.
Even with correlations close to 0.5, stocks only explain a small part of bitcoin’s movements, Cipolaro wrote. Statistically, this level means that about a quarter of price movements are driven by stock market factors, leaving the remaining three-quarters tied to forces unique to the crypto market.
These 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 environment rather than a structural merger between asset classes. Bitcoin and growth stocks respond to liquidity conditions and investors’ risk appetite.
“This differentiation supports Bitcoin’s role as a portfolio diversifier,” Cipolaro wrote. “Although correlations between assets and stocks are currently high, they remain far from being decisive for Bitcoin returns.”
The evolving role of Bitcoin
NYDIG’s note also addresses recent comments from high-profile investors. Chamath Palihapitiya And Ray Dalio have sparked debate over whether early defenders used this asset. Cipolaro instead argued that the debate had shifted from whether Bitcoin could survive to whether it could serve as a reserve asset for central banks.
Palihapitiya, one of the first supporters of 2013 called Bitcoin “Gold 2.0” recently questioned whether this asset meets the needs of sovereign balance sheets.
Dalio has raised similar concerns for years, highlighting volatility, regulatory risk and long-term technological threats such as advances in quantum computing.
Cipolaro said these criticisms reflect changing expectations as Bitcoin moves from a retail-focused asset to one held by institutions. Nonetheless, 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 could ultimately further validate the asset class, but it 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 value transfer, digital scarcity, and operation independent of any single government, institution, or monetary authority,” the note concludes.
Learn more: Crypto Bulls Slam Ray Dalio’s ‘Tired Narratives’ to Defend Bitcoin’s Future
