Bitcoin's Correlation with Nasdaq Remains High Amid Market Shifts

According to BlockBeats, a recent report by Wintermute highlights that Bitcoin maintains a strong correlation of 0.8 with the Nasdaq index. However, Bitcoin's trading patterns show a bearish tendency, reacting more significantly to market pessimism than optimism. Throughout this year, Bitcoin's decline on stock market down days has generally been greater than that of the indices, while its gains on up days have been smaller. This pattern was last observed during the bear market of 2022. Wintermute identifies two main factors contributing to this phenomenon. During most of 2025, funds typically directed towards the cryptocurrency sector, including new token issuances, infrastructure upgrades, and retail participation, have shifted towards the stock market. Large-cap tech companies have become the focus for institutions and retail investors seeking high beta/high growth opportunities. While Bitcoin remains correlated with global risk sentiment shifts, it does not proportionally benefit when optimism returns. It acts more like a macro risk 'high beta tail' rather than an independent narrative, with the downside beta effect persisting but the upside narrative premium disappearing. The current liquidity situation in the cryptocurrency market differs from previous risk cycles. Stablecoin issuance has stabilized, ETF inflows have slowed, and market depth on trading platforms has not returned to early 2024 levels. This fragility amplifies negative reactions during stock market corrections. Consequently, Bitcoin's participation in declines remains higher than in rallies, exacerbating this performance discrepancy.