Bitcoin's Fed Connection Evolves, Not Decouples

A nine-year review of data from the Federal Reserve and its impact on Bitcoin has revealed an evolving relationship between the two, rather than a complete decoupling.

In recent years, the Federal Reserve has implemented policies that have not led to a significant drop in Bitcoin's price, contrary to traditional expectations. In fact, during a year of quantitative easing from October 2025 to September 2026, Bitcoin dropped by 38%, while equities rose 16.8% and the S&P 500 rose 13.0%. This challenges the idea that rate cuts and balance sheet expansion lead to price increases in crypto assets.

A deeper analysis of the data shows a shift in the correlation between M2 growth and Bitcoin returns, from positive to negative (-0.766) in recent high-rate phases. This indicates that liquidity expansion no longer guarantees price increases for crypto assets.