Bitcoin is trading in tandem with stocks? This chart shows that relationship as markets face a more hawkish Fed

The argument has long existed — some bitcoin supporters have touted the cryptocurrency as “digital gold,” a hedge against inflation and a store of value. 

But others point out that bitcoin lately has been trading in tandem with sentiment around the stock market, especially during the past few months, as investors adjust to the Federal Reserve’s plans to tighten financial conditions for the first time in nearly two years, and sooner than previously expected. 

As evidence of that trend, the 100-day correlation between bitcoin BTCUSD, 1.84% and stocks represented by the S&P 500 SPX, 0.04%, reached about 0.49 on Tuesday, the highest level since July 2020, according to Dow Jones Market data. 

What’s more, the 60-day correlation between bitcoin and S&P 500 reached 0.54, the highest since at least 2010, the early days of the cryptocurrency.