Crypto’s Correlation to Equities Dips Following All-time Highs in May

Bitcoin and ether have also shown high correlation with the Nasdaq and S&P 500 on longer time frames

article-image

blockworks exclusive art by axel rangel

share
  • Bitcoin and ether fell back from previous record-breaking correlations with stock prices
  • Traders still have an eye on equities though, and a rebound in stocks is expected to be good news for crypto prices

Bitcoin and ether prices have decoupled from their previous all-time high correlations with equities, but experts say traders shouldn’t write off stock prices just yet. 

In May, the correlation coefficient between bitcoin and the tech-heavy Nasdaq broke 0.8 for the first time — bitcoin’s correlation to the S&P 500 also hit similar levels in early May. In June, the correlation between bitcoin and the S&P 500 fell to around 0.5, according to data from Coin Metrics. A coefficient of 1 means the assets are moving in tandem, while a -1 signals the opposite. 

Source: Kaiko

“Previous all-time highs were reached in the aftermath of the March 2020 crash, where all financial assets experienced extreme drawdowns, which saw BTC’s correlation with the S&P 500 hit 0.76,” said Clara Medalie, strategic initiatives and research director at data provider Kaiko.

“Since May’s all-time highs, bitcoin’s correlation has since retraced following a divergence in trading patterns for the two asset classes.” 

Ether, which for the past six months has traded almost as one with bitcoin with a correlation coefficient of 0.9, has experienced the same trend. In May, the correlation coefficient between ether and the S&P 500 broke 0.7 before falling to around 0.60 in June, according to data from Coin Metrics. 

“This divergence was spurred by a wave of dramatic collapses of some of the industry’s largest firms, causing crypto prices to tank far faster than equities,” Medalie said. 

But even as bitcoin and ether begin to trade more independently from equities, the broader trend is likely to continue. 

“Crypto is highly correlated to equities, so if equity markets were to turn around, this would likely have a bullish effect on crypto,” Medalie said.

“It is clear that investors have treated equities and cryptoassets as risky assets over the past few months amid an increasingly fraught macro environment.” 

Analysts are not holding their breath for a stock market bounce anytime soon, especially with current inflation levels and increasing uncertainty surrounding the Federal Reserve’s plans for interest rate increases. 

“No one wants to buy the dip anymore after seeing a few stock market rebounds get completely faded,” Edward Moya, senior market analyst at OANDA, wrote in a note Wednesday. “Investors removed $10 billion out of equity funds last week and it doesn’t seem likely that sentiment will dramatically improve that the Fed will be able to deliver that soft landing.” 

Traders are still keeping a close eye on stocks, Dan Matuszewski, co-founder of investment firm CMS Holdings, said. Invesco’s QQQ Trust, known as the Qs, is one tech-heavy ETF Matuszewski said he’s always watching. 

“We mostly do what the Qs are doing,” Matuszewski said. “They’re a pretty good proxy for a while now, at least until things calm. I say this because we come in every day and sometimes we’re really just trading the Qs.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template (1).jpg

Research

As AI supercharges surveillance, privacy becomes a prerequisite and the winning stack will combine confidentiality with selective disclosure. Zcash’s Tachyon, composable standards on Ethereum/Solana, and compliance-aware pools aim to make private rails the new norm.

article-image

Bain Capital Crypto and Haun Ventures co-led the round as demand grows for Bitcoin-denominated savings and annuities

by Blockworks /
article-image

NYSE owner’s investment values the prediction market at $8–9 billion, signaling Wall Street’s entry into event-based trading

by Blockworks /
article-image

Pineapple begins deploying its $100 million Injective Digital Asset Treasury, staking INJ to earn yield and fund onchain mortgage ambitions

by Blockworks /
article-image

Staking levels in the ether funds will depend on protocol unstaking queue times and anticipated redemption activity, firm says

article-image

ETF inflows, miner strength, and tightening supply drive Bitcoin past its prior peak amid renewed demand for scarce assets

by Blockworks /
article-image

The Guidestar team, led by Alex Nezlobin, will join Uniswap Labs to enhance automated market maker design and smart order routing

by Blockworks /