In the last decade, Bitcoin has evolved from a speculative asset to a totally new asset class that is now recognized by institutional investors. The price volatility still remains, but it has been going down significantly in the last period and increasingly the Bitcoin price started to behave like some of the traditional markets, especially the tech companies. How does Bitcoin’s price behave in relation to traditional financial markets? Does Bitcoin act as a hedge like gold, or is it more closely linked to equity markets like NASDAQ? Another important metric that has emerged in correlation with Bitcoin is the global liquidity supply (money), aka money printing. Bitcoin has been especially sensitive to the money supply.
Here we will explore the correlation between Bitcoin’s price and three key indicators of traditional markets:
- the NASDAQ index,
- gold, and
- global liquidity supply (M2 money supply).
Bitcoin vs NASDAQ: A Tech-Companies Correlation?
NASDAQ is one of the most important stock market indices, representing a large portion of the tech-heavy sector in the United States. Given Bitcoin's rise among retail investors and its popularity as a "tech" asset, it has started to behave a lot like NASDAQ. After all, both are volatile and often affected by similar factors such as macroeconomic trends, interest rates, and investor sentiment.
In the following chart we will take a look at Bitcoin vs NASDAQ price movements over time for the period of 2014 to August 2026.
The above is the chart for the prices of the both assets. It is a chart with double axes values with BTC price on the left and the NASDAQ value on the right.
From observing the price of the two we can see that there is some correlation, especially in the second half of the chart starting from 2020. Both assets peaked in 2021 and then dropped in 2022, with Bitcoin making stronger moves on both sides. We can also notice the recovery in 2023 and 2024, followed by a larger separation between the two during 2025 and early 2026. At the end of the chart Bitcoin recovered to around 77.7k, gaining close to 20% in August. NASDAQ ended at 26,371, up 3.9%. They moved in the same direction, but Bitcoin move was much stronger.
Pearson correlation coefficient!
This coefficient is used to measure a correlation between two values. It is in the range of -1 to 1. A positive correlation indicates that Bitcoin and NASDAQ tend to move in the same direction, while a negative correlation suggests the opposite. The coefficient value can range from -1 to 1, where 1 is a perfect positive correlation, 0 is no correlation, and -1 is a perfect negative correlation. Here is the chart for this coefficient for BTC and NASDAQ.
The strong white is a one year rolling coefficient, meaning it is based on the past year’s performance of the two assets, while the doted pale is the 90 days coefficient. We can notice that the short term is much more volatile. For the purpose of this analysis, we will focus on the yearly one. We can notice that the last time these two moved in opposite direction for a longer period was back in 2019. Since then, the correlation was mostly positive, although with different intensity. There was a drop in 2022 and another much sharper drop in 2026. At the end of August the yearly coefficient stands at -0.48, while the short 90-day coefficient recovered to 0.21. This means the longer trend is still negative, while the recent moves show a mild positive correlation.
Bitcoin vs Gold: Analog VS Digital Money
Gold has long been regarded as a safe haven asset, especially in times of economic instability. As inflation fears rise, gold traditionally becomes more attractive. Bitcoin has been called the digital gold but with significant differences in its volatility. In the following chart we will take a look at Bitcoin vs Gold price movements over time for the period of 2014 to August 2026.
Gold had a much smoother ride. It stayed around 1,300 USD for years, rose toward 2k in 2020, and went parabolic in 2025. After making a new ATH above 5k early in 2026, it corrected and then closed August near 4,452 USD. Bitcoin peaked in 2017, 2021 and again in 2024-2025. After dropping sharply in early 2026, it recovered during August and closed around 77.7k. The full chart still shows no clear long-term correlation. In August both moved up, but with different intensity: Bitcoin gained close to 20%, while Gold increased 9.9%.
Pearson coefficient for BTC VS GOLD Here is the chart for the coefficient for these two.
A very volatile first half of the chart, with no clear patterns up to 2020. This is understandable since Bitcoin is still new in the period. Since 2020 we can see negative correlation in 2022, when BTC was falling and GOLD rising. The two were more correlated in 2023-2025, but the coefficient dropped sharply again in 2026. At the end of August the yearly value remained negative at -0.50, while the 90-day coefficient jumped to 0.70 as both assets recovered.
Bitcoin vs Global Liquidity Supply: How Money Printing Affects Bitcoin
This is something that most of the Bitcoiners are calling for. Whenever the money printer is turned on, Bitcoin increases in price. Some have even said that Bitcoin is now an index for global liquidity.
Let’s take a look at the Bitcoin price and global liquidity, or M2. For this update the latest published M2 change is applied through July, then held flat in August.
From the first glance at this chart, we can notice some correlation in the previous bull market. Global liquidity grew in 2020 from 80T to 100T in less than a year, while Bitcoin went up. In 2022 liquidity dropped and Bitcoin dropped a lot as well. Since then, the relationship has been much less consistent. In August Bitcoin gained nearly 20%, while global liquidity stayed flat around 119.43T, showing a clear short-term divergence.
Pearson coefficient for BTC VS M2 Here is the chart for the coefficient for these two.
There is a lot of volatility here with no significant periods for correlation, for at least few years. The yearly correlation ended August at -0.90. The 90-day coefficient was positive at 0.43, mainly because Bitcoin recovered while M2 stayed flat.
While many macro analyses are calling Bitcoin a liquidity index, this obviously is not the case, at least not yet. There is no clear established pattern between the two. From time to time they move in the same direction and have high correlations, but it is usually short lived. August again shows that Bitcoin can make a large move while the latest liquidity level is unchanged.
Bitcoin Correlations Summary
From the above charts we can notice that some patterns started emerging after 2020 and mostly for the yearly rolling window correlation. The short 90 days are still volatile. When we plot all three major indicators for the period from 2020 through August 2026 and only on a yearly basis we get this.
Historically Bitcoin was most often correlated with NASDAQ. At the end of August all yearly values were negative: -0.48 for NASDAQ, -0.50 for Gold and -0.90 for global M2. Prior to the recent price drop, Bitcoin had increased its correlation with Gold and NASDAQ and recorded a few years of high correlation. The 2026 decline pushed all yearly coefficients lower. The August rebound improved the 90-day values to 0.21 for NASDAQ, 0.70 for Gold and 0.43 for M2, while the yearly readings stayed negative.
The decoupling narrative is still here, but August made it more nuanced. Bitcoin gained close to 20%, much more than NASDAQ and Gold, while global M2 was flat. This time Bitcoin decoupled through a stronger recovery, not only by dropping on its own. One month is not enough for a new trend, so the rolling correlations are worth following.
All the best @dalz
