Why Bitcoin Is Increasingly Behaving Like Tech Stocks: Experts Explain
Bitcoin was once seen as a symbol of financial freedom—a decentralized asset that is separate from the traditional financial system. But now many investors are asking: Why is Bitcoin behaving so much like a tech stock?
On Wednesday, Barstool Sports founder Dave Portnoy shared his confusion on social media: “If Bitcoin was created to be anti-dollar and free from government control, why does it move in lockstep with the US stock market?” Portnoy wrote. “Markets up, Bitcoin up. Markets down, Bitcoin down.”
The Link Is Becoming Clear
Recent market volatility has reinforced the connection between Bitcoin and risk assets like tech stocks. Amid escalating trade tensions and inflation data that has investors worried, Bitcoin has dropped to around $82,000, marking a drop of nearly 5.5% in the past 24 hours. Other coins like Ethereum and XRP have also plunged, mirroring a similar negative trend on US stock exchanges.
In just one day, after former President Donald Trump announced additional tariffs on imported goods, major stock indexes plunged: Nasdaq lost nearly 6%, S&P 500 fell 4.8%, and Dow Jones fell nearly 4%. Bitcoin was not spared from this sell-off.
According to Mike Marshall, director of research at Amberdata, this phenomenon is no coincidence. “Since the SEC approved spot Bitcoin ETFs in early 2024, major financial institutions have started to access Bitcoin at a larger scale than ever before,” Marshall told Decrypt.
The entry of institutional investors has led to Bitcoin being viewed and treated like a high-risk tech stock – something that was unthinkable in the early years of crypto.
“Today, Bitcoin tends to move in lockstep with interest rates, inflation, and the Federal Reserve’s monetary policies. When market confidence rises, Bitcoin rises. When uncertainty sets in, BTC sells off along with stocks,” Marshall explains.
Part of the system it once opposed?
While there are still internal factors like technology updates or crypto regulations that can influence Bitcoin’s price, it’s clear that macro factors now play a dominant role. This has many analysts worried: is Bitcoin integrating into the very financial system it once sought to replace?
“Bitcoin is too young to be a safe haven,” said Bloomberg ETF analyst Eric Balchunas. “It has the same high-growth characteristics as a tech stock, and that’s how the market is pricing it.”
However, not everyone shares this pessimistic view.
“What we’re seeing is short-term volatility, largely from institutional investors acting like Bitcoin is a tech stock,” said Cory Klippsten, CEO of Swan Bitcoin. For him, Bitcoin’s true value lies not in immediate returns, but as “a means of escaping the fiat system over the long term.”
While Bitcoin is currently behaving like a stock, its loyalists believe that its fundamental differences will soon lead it to go its own way – independent, decentralized, and hard to replace.