Bitcoin Breaks Away from AI Stocks but Oil's Price Holds Key to Its Future

The correlation between Bitcoin and AI-driven stocks has been decreasing over the past quarter. According to a joint report from Coinbase Institutional and Glassnode, Bitcoin's daily correlation with the S&P 500 fell to 0.12 during Q2, down from 0.58 in Q4 of last year. Meanwhile, its correlation with gold rose to 0.57, and with silver reached 0.63.

This shift separates Bitcoin from the AI-driven equity trade that carried much of crypto's price action over the past two years. However, the report also notes that a firm dollar and hawkish Fed can pull both Bitcoin and gold down together. A shared correlation with gold offers no protection when both assets face the same higher cost of money.

The report frames the second-quarter gold link by pointing to a firmer dollar and a hawkish Fed that weighed on both Bitcoin and gold, pulling them down together. The path ahead for Bitcoin now depends on whether the AI-stock selloff underway lowers the cost of money or raises it.

Oil will answer that before the Fed does, and Bitcoin will trade on whichever direction it takes. A return to $74 per barrel would support the bull case, while sustained prices above $90 could keep the bear case alive. Brent crude surged past $100 before slipping to roughly $96 by July 24.