Record Correlation Observed Between Bitcoin and US Stocks

Bitcoin’s 90-day correlation with the S&P 500 Volatility Index (VIX) has reached an all-time high, indicating stronger ties between the cryptocurrency and traditional markets. This alignment, reported in Coindesk on July 24, underscores Wall Street’s significant role in the current crypto cycle.

The linkage between Bitcoin and US stock volatility, marked by a correlation coefficient peaking at 0.88 according to Coindesk, is an indication of how institutional activity is reshaping the cryptocurrency market. Since early 2025, institutions have reportedly compressed Bitcoin’s volatility by selling call options. This strategy has potentially suppressed Bitcoin’s market swings, aligning them more closely with US stock market volatility.

Key Developments, Impact, and Reactions

Bitcoin’s volatility index declined from 67% to 42% over the past year, inversely moving with its price appreciation of 26%. Markus Thielen of 10x Research highlights Wall Street’s dominance in option markets, stating, “While I focus on volatility and options flows, I suggest consulting direct market data for accurate correlations between indices, and no exact values around 0.88 are confirmed as of now.” His analysis emphasizes institutional investors’ influence on risk dynamics within the crypto sphere.

The increased correlation has drawn attention from analysts and traders alike. Observations by professionals such as Thielen indicate an intertwining of crypto assets with traditional financial market strategies. Traders on both sides are adjusting their calculations to account for new market behaviors emerging from this correlation between digital and traditional assets.

Did you know? In previous market cycles, spikes in Bitcoin’s correlation with the S&P 500 occurred during major economic events, notably aligning in March 2020, July 2023, and earlier in 2025, reflecting global risk management practices.

Experts’ Analysis and Future Perspectives

Did you know? In previous market cycles, spikes in Bitcoin’s correlation with the S&P 500 occurred during major economic events, notably aligning in March 2020, July 2023, and earlier in 2025, reflecting global risk management practices.

CoinMarketCap indicates Bitcoin (BTC) experienced a moderate decline, priced at $117,844.43 with a market capitalization of $2.34 trillion. Despite a slight downturn in the past 24 hours, Bitcoin has exhibited a 26.31% increase over 90 days. Circulation stands at 19.89 million out of a 21 million maximum supply, suggesting demand amidst institutional buying pressures.

Experts from the Coincu research team highlight that these developments could lead to a reshaping of hedging strategies in the crypto sector. Historical volatility trends and increasing regulatory scrutiny might prompt broader participation, influencing long-term pricing stability for both crypto and traditional assets.