Since September 2024, the correlation between Bitcoin and traditional equities has surged, driven by aggressive US Federal Reserve rate cuts and the launch of Bitcoin ETFs by mainstream financial firms.

Over the past year, Bitcoin has increasingly aligned with risk-on assets, exhibiting a 76% correlation with the Nasdaq 100, which has risen to 92% in the last six months, reflecting its growing integration into broader market dynamics.

Market sentiment remains optimistic, with low volatility indicated by the VIX at around 14.76, and Bitcoin ETF inflows exceeding $1.9 billion recently, signaling strong institutional confidence amid expectations of rate cuts.

Despite a recent 4% dip, Bitcoin's price continues to be influenced by macroeconomic factors, particularly the anticipated Federal Reserve rate cut, which could potentially boost both Bitcoin and equities if confirmed.

While Bitcoin's strong link to tech stocks suggests limited diversification benefits currently, many Web3 experts believe it will eventually decouple from equities and establish itself as 'digital gold,' though this transition has not yet occurred.