The relationship between Bitcoin and the US stock market underwent a dramatic change in 2025. At the beginning of the year, some still claimed that Bitcoin was a safe-haven asset, but by the end of the year, that argument no longer held water. What exactly happened behind the scenes?

The story in the first half of the year was like this: during the "triple kill" of US stocks, bonds, and the dollar, the S&P 500 fell by 3.66%, while Bitcoin instead rose by 8.31%. The market's logic at the time was clear — the US dollar's credit system was in trouble, so investors needed something to hedge against dollar risk, and Bitcoin became the "digital gold." But the turning point appeared at the end of the year. The Federal Reserve shifted to a hawkish stance, global liquidity began to tighten, and as a result, the correlation coefficient between Bitcoin and US stocks skyrocketed to 0.80, turning them into a fully linked duo. Safe-haven properties? Gone with the wind.

Here's an interesting pattern. Watching how US Treasury yields move can predict how Bitcoin and US stocks will behave: when Treasury yields rise, the dollar tends to strengthen due to safe-haven demand, but US stocks fall; when yields fall, the opposite happens — both the dollar and US stocks decline. Bitcoin also follows this logic. In simple terms, the Federal Reserve's monetary policy is the key switch controlling the correlation between these two assets.

By the end of the year, the core PCE data missed expectations, and the market's rate cut expectations re-emerged, prompting Bitcoin to start rebounding in anticipation. Liquidity is always the main character in this game.