Bitcoin Correlation With Dollar Surges To 0.25 As Hedge Role Uncertain

Bitcoin's (BTC) role as a hedge against the U.S. dollar is becoming increasingly uncertain, as recent data suggests that the cryptocurrency's movements are now aligning with the dollar. According to a June 20 report by Binance Research, Bitcoin's correlation with the U.S. Dollar Index (DXY) has surged to 0.25, the highest among major macro assets, marking an increase from May’s 0.15. Historically, Bitcoin has moved opposite to the dollar or remained unaffected. This shift indicates that Bitcoin may currently be reacting to the same liquidity conditions supporting the dollar rather than acting as a hedge against it.

The report also revealed a 0.33 correlation between Bitcoin and 10-year Treasury yields, suggesting the cryptocurrency’s potential as an inflation hedge. However, Bitcoin’s relation with the S&P 500 has dropped to 0.21, signaling a move away from its earlier equity-like trading pattern. Furthermore, Bitcoin’s link to gold remains mildly negative at -0.11. While gold tends to respond to traditional risk sentiment and interest rates, Bitcoin is more influenced by liquidity and speculative flows. This behavior suggests that, despite overlapping narratives, Bitcoin and gold have been absorbing macro flows differently, likely driven by Bitcoin’s higher volatility, more speculative positioning, and greater sensitivity to liquidity shifts.

In 2025, as economic uncertainty grew mostly from trade tariffs, gold rallied as a safe haven, while Bitcoin mostly held firm above the $100,000 mark. The Binance findings come as Bitcoin faces short-term volatility mainly from geopolitical tensions in the Middle East. Before the escalation, Bitcoin nearly reached $110,000 but has since retraced. Despite the recent price drop, Binance pointed out that demand for the asset remains strong, especially when considering spot BTC exchange-traded funds (ETFs). These products have seen $2.4 billion in net inflows over eight days through June 18, indicating that long-term investors continue to buy the dip.