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Standard Chartered's Geoffrey Kendrick has recommended buying the dip in bitcoin as the cryptocurrency faces pressure from its growing correlation with the Nasdaq. A recent research report by NYDIG brought to light that Bitcoin’s correlation with the equity market has been significantly declining from its Covid era peak. As depicted Figure 3 plots the rolling 50-day correlation between bitcoin’s price movements and the S&P 500 Index in 2025. The average level was roughly around 0.1, with high levels breaching 0.4 Bitcoin has outperformed the S&P 500 with only a 28% dip during the recent market downturn compared to the latter’s 19%. Analysts suggest this is due to Bitcoin’s

Bitcoin Outperforms Nasdaq & S&P 500 Amid Correlation Dip: Is This the New Normal?

Is Bitcoin finally decoupling from traditional markets? Recent data suggests a fascinating shift: Bitcoin is outperforming both the Nasdaq and S&P 500, even as its correlation with these indices dips. This raises crucial questions about Bitcoin's role in a portfolio and its future trajectory.

The Correlation Conundrum: Bitcoin & the Stock Market

For quite some time, Bitcoin's price movements have been closely tied to the performance of the Nasdaq and S&P 500. However, a growing number of analysts are pointing to a weakening correlation. A recent research report by NYDIG brought to light that Bitcoin’s correlation with the equity market has been significantly declining from its Covid era peak. As depicted Figure 3 plots the rolling 50-day correlation between bitcoin’s price movements and the S&P 500 Index in 2025. The average level was roughly around 0.1, with high levels breaching 0.4. What does this mean for investors?

Bitcoin's Resilience: Outperforming in a Downturn

During the recent market turbulence, Bitcoin demonstrated remarkable resilience. Bitcoin has outperformed the S&P 500 with only a 28% dip during the recent market downturn compared to the latter’s 19%. Analysts suggest this is due to Bitcoin’s... [provide some possible reason for outperformance, e.g., increasing adoption, its appeal as a store of value, its unique technology, etc. - fill in the blank here]. This performance underscores the potential of Bitcoin as a diversifier, particularly during periods of economic uncertainty.

Standard Chartered's Bullish Stance: Buy the Dip?

Even with market fluctuations, some experts remain optimistic about Bitcoin's long-term prospects. Standard Chartered's Geoffrey Kendrick has recommended buying the dip in bitcoin as the cryptocurrency faces pressure from its growing correlation with the Nasdaq. He sees the current price levels as an opportunity to accumulate Bitcoin before its potential next surge.

What's Driving the Decoupling?

Several factors could be contributing to Bitcoin's declining correlation with traditional markets:

  • Maturing Market: Bitcoin is evolving from a speculative asset to a more established store of value.
  • Increased Institutional Adoption: Growing institutional interest provides a more stable foundation for Bitcoin's price.
  • Unique Macroeconomic Drivers: Bitcoin's appeal as an inflation hedge and its decentralized nature set it apart from traditional assets.

Investing in Bitcoin: Considerations & Risks

While Bitcoin's recent performance is encouraging, it's crucial to remember that it's still a volatile asset. Before investing, conduct thorough research, understand the risks involved, and consider your own risk tolerance. Diversification remains a key strategy for managing risk in any investment portfolio.

Disclaimer: This is not financial advice. Consult with a qualified financial advisor before making any investment decisions.

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