Key Takeaways:

  • Bitcoin is up 5% in three days, despite the stock decline.
  • Has BTC decoupled from risk-on assets?
  • The correlation with gold grew.

YEREVAN ( – Bitcoin (BTC) advanced 5% since bottoming at around $27,500 on May 1. As a result, the flagship crypto traded at just under $29,200 in the European session on May 4.

Bitcoin (BTC) daily price chart. Source:
Bitcoin (BTC) daily price chart. Source:

Notably, the uptick came from the Fed’s decision to raise interest rates, which contributed to the stock market’s decline, raising the question: has Bitcoin decoupled from the risk-on assets?

Bitcoin’s sanctuary status back?

Generally, any asset that provides a hedge from volatility elsewhere could be considered a sanctuary asset. For example, after the Federal Reserve implemented a sequence of interest rate hikes in 2022 to curb inflation, investors abandoned the risk-on stock market, betting on the dollar to provide safety.

On the other hand, precious metals, such as gold, have historically served as a hedge against the dollar and the fiat economy. But they have sometimes failed to shield their investors and moved in toe with the crisis rather than flourishing. For example, during the Great Crisis of 2008, Gold spot price lost over 30% before picking up in 2009.

Thus, “haven” is an erratic status that heavily depends on the market conditions and the general geopolitical situation.

Also read: Hawkish Powell Pumps Interest Rates by 25 bps – Stock Market Dive Sparks Recession Talk.

Throughout 2022 Bitcoin traded in unison with risk-on assets such as equities. It did not provide a sanctuary for investors seeking to hedge their funds against rising inflation and global economic turmoil.

However, the tables might have turned.

Has BTC decoupled from stocks?

While Bitcoin started 2023 with a daily correlation coefficient near 0.90 with the S&P 500, Nasdaq, and Dow Jones Industrial Average (DJIA), those have declined.

Bitcoin and S&P 500 exhibit negative bias. Source:

According to James Butterfill, the head of research at CoinShares, Bitcoin’s correlation to equities has dropped to 12%, the lowest reading since 2021. In a recent interview, he asserted that “equities never do well, with the prospects of recession, but something like Bitcoin will do quite well because it’s like a monetary policy hedge.”

Geoff Kendrick, head of FX research at Standard Chartered, agreed that Bitcoin could do well in the coming recession and the event of a default. However, he commented that Bitcoin would not rally in a straight line in the event of a US default but rather “could dip by $5,000 initially, then jump by $25,000,” he estimated.

He also asserted that not every crypto would follow the bullish lead and suggested long Bitcoin and short Ethereum.

Correlation with gold rises

Conversely to stocks, according to analytical platform Kaiko, Bitcoin’s correlation with gold has rocketed to a two-year high.

Bitcoin correlation with gold rockets. Source:
Bitcoin correlation with gold rockets. Source:

Moreover, clinical psychologist Jordan Peterson mentioned the notion of gold-backed Bitcoin in an interview with outspoken Bitcoin basher and gold proponent Peter Schiff. The latter agreed that backing Bitcoin with gold would allow the crypto to have the best of both worlds and become a store of value and a medium for exchange simultaneously.

Also read US Debt Ceiling Crisis update: Joe Biden to Meet House Speaker Kevin McCarthy to prevent default by June.  

While the path ahead for Bitcoin is unclear, decoupling from stocks could bring the alpha crypto a temporary sanctuary status as recession looms. The coming quarter will shed more light on whether the decoupling will continue. If so, Bitcoin could confidently trade above $30,000 for the first time a year.

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