The conversation around Bitcoin has moved beyond doubts about its survival and toward a broader question: whether the digital asset can eventually operate as a sovereign reserve asset. As the cryptocurrency matures, critics and supporters increasingly judge it by the standards applied to institutional assets.
Even though bitcoin has recently shown a tendency to move in tandem with U.S. equities, that behavior does not undermine its role as a portfolio diversifier, according to financial services firm NYDIG. In a weekly research note, the firm’s global head of research, Greg Cipolaro, said correlations between bitcoin and major stock benchmarks such as the S&P 500, the Nasdaq 100 and the software-focused iShares Expanded Tech-Software Sector ETF (IGV) have increased over the past few months.
That trend has prompted some analysts to argue that bitcoin now behaves like a proxy for technology stocks. Cipolaro disagrees with that characterization.
Even when correlation levels approach 0.5, equities account for only a limited share of bitcoin’s price movements, he explained. From a statistical perspective, such a relationship suggests that about a quarter of bitcoin’s price changes are linked to stock market factors, while the majority are driven by forces unique to the crypto ecosystem.
Those forces include capital inflows into bitcoin investment funds, shifts in derivatives positioning, changes in network adoption and evolving regulatory conditions.
Cipolaro noted that the recent alignment between bitcoin and equities likely reflects the current macroeconomic environment rather than a structural convergence between the two asset classes. Both bitcoin and growth-oriented stocks tend to respond to broader factors such as global liquidity conditions and investor risk appetite.
Even so, the relationship does not eliminate bitcoin’s diversification benefits. Elevated correlations with equities remain far from decisive in determining the cryptocurrency’s returns, Cipolaro wrote.
Bitcoin’s shifting narrative
The NYDIG note also addressed comments from prominent investors including Chamath Palihapitiya and Ray Dalio, whose recent remarks have fueled debate about bitcoin’s future role in global finance.
Palihapitiya, an early supporter who once described bitcoin as “Gold 2.0” in 2013, has recently questioned whether the cryptocurrency meets the requirements for sovereign balance sheets. Dalio has long expressed similar concerns, highlighting issues such as volatility, regulatory uncertainty and potential technological risks, including advances in Quantum Computing.
According to Cipolaro, these criticisms reflect changing expectations as bitcoin evolves from a retail-dominated asset into one increasingly held by institutions. However, he argued that bitcoin’s long-term trajectory does not depend on central bank adoption.
Instead, the network has steadily expanded its user base—from individual investors to family offices, asset managers and exchange-traded funds—following a path different from many traditional financial innovations that began with institutional capital.
While central bank ownership could further legitimize the asset class, Cipolaro said it is not necessary for bitcoin’s continued development.
Ultimately, the report concluded that bitcoin derives its value from its globally distributed network, political neutrality and technical characteristics that enable censorship-resistant value transfers, digital scarcity and operation independent of any single government, institution or monetary authority.
