Geopolitical tensions and shifting Fed expectations have decoupled Bitcoin from traditional stock and gold correlations, with BTC down 31% YTD while equities and commodities diverge.
Macro & Markets ·
According to research from crypto trading firm BIT, the S&P 500 has gained 9% year-to-date while gold has declined 6% and Bitcoin has fallen 31%, marking a sharp departure from historical patterns where these assets moved in tandem. The divergence stems from shifting macroeconomic catalysts: expectations around Federal Reserve policy under Kevin Warsh's potential leadership shifted markets toward pricing in a more restrictive monetary stance, while geopolitical tensions in the Middle East and the AI investment cycle have each redirected capital flows independently rather than moving all three assets together.
The report identifies three distinct phases that have fractured traditional correlations. Initially, hawkish Fed expectations pressured assets benefiting from easier liquidity. When Iran closed the Strait of Hormuz following strikes by the U.S. and Israel, markets expected central banks in the region to redirect funds toward infrastructure reconstruction rather than gold purchases, causing equities and bullion to fall alongside Bitcoin. Most recently, the AI boom—marked by developments including Nvidia's stake in Marvell Technology and Anthropic's revenue growth—lifted tech stocks while draining capital from cryptocurrencies and commodities.
BIT suggests Bitcoin may be approaching a cycle bottom between $50,000 and $55,000, with gold technically oversold. The firm expects these divergent paths to realign if the September Federal Open Market Committee meeting signals a shift toward easier policy and AI spending demand sustains while inflation moderates, potentially allowing gold, Bitcoin, and tech equities to rise together.