Correlation of Bitcoin, SP500, Nasdaq 100.

Crypto proponents have long argued that Bitcoin and other digital assets, on account of their being an idiosyncratic asset class, could act as hedges against wild swings in other areas of the financial market. That proposition is currently being tested as more speculative areas of the market come under pressure amid expectations interest rates could climb higher much sooner than previously expected.

This graph compares the price movement of SPX against Nasdaq 100 and especially against Bitcoin since mid-2021.

It is not a surprise that these markets are correlated, but it is an illustration of the force that one has over the other and further evidence of how wrong is the idea that digital assets can serve as a hedge in an investors portfolio.

BTCUSDT
NDX
SPX