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Bitcoin is not acting like “digital gold” because real gold and USD correlations collapsed toward zero
In 2025 and early 2026, Bitcoin's behavior has been less “digital gold” and more regime-dependent. Sometimes it trades like a tech beta, then like a rates-and-liquidity-duration trade, and only intermittently like a hedge.
The real story is which macro regime makes which identity dominate next.
The setup matters. The Federal Reserve held the Fed funds target range at 3.5% to 3.75% on Jan. 28, reinforcing a “watch incoming data” stance rather than a clean easing tailwind.
The IMF's January 2026 update projects 3.3% global growth in 2026, with “technology investment and accommodative financial conditions” offsetting trade headwinds, an environment that tends to keep equity and tech risk factors relevant.
Against that backdrop, Bitcoin's correlations indicate which identity is prevailing.
CME Group notes that crypto's correlation with the Nasdaq 100 in 2025 and early 2026 has been as strong as +0.35 to +0.6, whereas Bitcoin's correlations with gold and the US dollar have weakened to roughly zero in recent years.
That's a shift from 2022 and 2023, when Bitcoin's negative correlation with the US dollar reached about –0.4. In this regime, Bitcoin trades less like a macro hedge and more like a liquidity-sensitive tech risk factor.
Three identities, and when does Bitcoin behave like each one of them
Hedge means that Bitcoin should benefit when the dollar weakens or when investors seek a store-of-value hedge with gold-like characteristics.
High-beta tech refers to Bitcoin's behavior as a leveraged cousin of the Nasdaq 100 on risk-on and risk-off days.
Liquidity sponge means Bitcoin absorbs and reflects changes in financial plumbing, such as ETF flow reversals, funding conditions, reserves and cash facilities, acting like the first asset repriced when liquidity tightens or loosens.
The piece is evergreen if you treat these as three identities that Bitcoin rotates among, rather than one “true” identity. The rotation depends on the macro regime, which is measurable.
The “digital gold” claim has been weaker recently. CME's framing is direct: Bitcoin's rolling correlation with gold has never been very high, peaking at +0.41 on a rolling 12-month basis during the quantitative easing era, and has been near zero since 2024.
Bitcoin's negative dollar correlation, which reached about -0.4 in 2022 and 2023, has also weakened toward zero by 2025 and early 2026.
The hedge identity isn't dead, but it's dormant. In the current regime, Bitcoin doesn't decouple from the dollar when the dollar weakens, and it doesn't track gold's moves.
For the high-beta tech, the evidence is strongest. CME notes crypto has shown a consistently positive relationship with the Nasdaq 100 since 2020, and in 2025 and early 2026 it's often in the +0.35 to +0.6 range.
In “AI-risk-on and risk-off” days, Bitcoin trades like an equity risk factor, often falling more than tech on selloffs. High beta cuts both ways: Bitcoin amplifies Nasdaq gains on the way up and magnifies losses on the way down.
This is the identity that predominates when growth holds, and financial conditions remain supportive.
For the liquidity sponge personality, rates can be flat while liquidity still moves. BlackRock argues that Bitcoin has historically shown sensitivity to dollar real rates, similar to gold and emerging-market foreign exchange.
As a result, “slower cuts or higher real yields” can pressure Bitcoin even if no new policy shock lands. FRED provides clean public series to anchor “plumbing”: the Fed balance sheet and reverse repo facility usage.
Bitcoin can behave like a liquidity sponge when the marginal buyer or seller is flow-driven, regardless of the headline policy rate.
Scenarios and what to watch
While Bitcoin struggles to decide which identity it will assume, different scenarios are possible.
The first is “risk-on tech beta,” which serves as the base case if growth holds and financial conditions remain supportive.
Bitcoin's identity would be high-beta tech dominance if its rolling correlation with Nasdaq stays elevated in the +0.35 to +0.6 regime. Additionally, correlations with gold and the dollar remain weak, at approximately zero.
Bitcoin isn't hedging, but participating in the same risk complex as tech equities.
The second scenario is “sticky inflation and higher real yields,” which assumes the policy rate remains steady while real yields rise.
Bitcoin's identity would shift to liquidity and real-rate duration trade, with higher real rates and tighter financial conditions coinciding with Bitcoin drawdowns.
Reverse repo and other plumbing proxies show tighter reserve and liquidity conditions. Bitcoin sells off like a long-duration asset when the discount rate rises, even if nominal rates don't move much.
The third scenario is a “shock regime,” which involves trade disruptions, geopolitical escalation, or a credit event.
Bitcoin's identity would initially see correlations spike, with a potential “hedge” narrative reemerging later, and cross-asset correlations would rise during the initial shock as risk books de-gross.
Post-shock, if the dollar weakens and monetary or fiscal support rises, Bitcoin can regain “hedge-ish” behavior. However, this must be measured, not assumed.
The 2022 and 2023 regimes showed that Bitcoin could act more like a hedge when macroeconomic stress was paired with dollar weakness, but this is not automatic.
Myth-busting and what actually changes
Investors should stop arguing about what Bitcoin is and start measuring what Bitcoin is doing.
Correlations, real-rate sensitivity, and flow channels are observable and update faster than narratives. CME notes that other major tokens are highly correlated with Bitcoin, often in the +0.6 to +0.8 range, so Bitcoin's identity shift drags the complex with it.
Institutional market structure increases macro transmission. ETF flows can amplify moves in both directions: an easy on-ramp and an easy exit.
The liquidity sponge identity matters more now because institutional access is bidirectional.
Real rates matter, but so do plumbing and flows.
The Federal Reserve's balance sheet, reverse repo usage, and money stock are publicly available series that track financial plumbing. When these tighten or loosen, Bitcoin reprices quickly.
“Bitcoin is an inflation hedge.” Sometimes, but recent correlations with gold and the dollar have weakened. Don't assume hedge behavior without data. The evidence from 2025 and early 2026 indicates that Bitcoin behaves more like a technology risk factor.
“Bitcoin decouples when the USD falls.” That was more true in 2022 and 2023 than in 2025 and early 2026, per CME's discussion of dollar correlations.
“Rates are the only macro driver.” Real rates matter, but so do plumbing and flows. BlackRock's real-rate sensitivity framework, plus reverse repo and Federal Reserve balance sheet proxies, indicates that liquidity conditions can move Bitcoin independently of the headline policy rate.
What's at stake
Bitcoin's identity crisis in 2026 isn't a philosophical debate. Instead, it's an empirical rotation between three measurable regimes.
The current regime favors high-beta tech identity, with liquidity sensitivity as the secondary driver and hedge behavior mostly dormant.
That can change, and the tells are observable: correlation shifts, real-rate moves, ETF flows, and plumbing indicators.
The next regime will reveal which identity dominates, and the answer will appear in the data before it appears in the narrative.
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