Bitcoin Following Stock Indices Signals ETF Power, Not Underlying Value – Buy the Dip – Shayne Heffernan $BTC $SPY $QQQ
By Shayne Heffernan, April 10, 2025
I’ve been watching Bitcoin’s price action closely, and something stands out to me: Bitcoin ($BTC) is moving in lockstep with stock indices like the S&P 500 ($SPY) and Nasdaq 100 ($QQQ). I think this tells us more about the power of exchange-traded funds (ETFs) than it does about Bitcoin’s true value. For investors like me, this dip we’re seeing right now is a chance to buy in, and I want to break down why I see it that way.
Bitcoin’s Correlation with Stocks: A Sign of ETF Influence
I’ve noticed over the past few months that Bitcoin’s price has been tracking the movements of major stock indices pretty closely. When the $SPY or $QQQ takes a hit, Bitcoin often follows, and when they rally, Bitcoin tends to climb too. I don’t think this is a coincidence—it’s a clear sign of how much influence ETFs have on the crypto market these days. Since the launch of spot Bitcoin ETFs in early 2024, institutional money has poured into Bitcoin, tying its price more tightly to traditional markets. Big players like BlackRock and Fidelity are behind these ETFs, and their buying and selling patterns are driving Bitcoin’s price more than the fundamentals of the blockchain itself.
I’ve been following the data, and it’s striking: Bitcoin’s 90-day correlation with the $SPY is hovering around 0.7, which is pretty high. That means when the stock market dips—like we’ve seen this week with the uncertainty around the US Consumer Price Index (CPI) and Initial Jobless Claims data—Bitcoin feels the pressure too. But I don’t see this as a reflection of Bitcoin’s underlying value. To me, Bitcoin is still the decentralized, inflation-resistant asset it’s always been. What’s happening here is that ETF-driven trading is creating a short-term correlation, and that’s pulling Bitcoin down with the broader market.
Why This Dip Is a Buying Opportunity
I think this dip in Bitcoin’s price is a golden opportunity to buy in, and here’s why. The current market chaos—fueled by today’s US economic data releases and tomorrow’s Producer Price Index (PPI) and Consumer Sentiment Index—has dragged Bitcoin down alongside stocks. But I don’t believe this reflects Bitcoin’s long-term potential. I’ve been in the markets long enough to know that these kinds of dips, driven by external factors like ETF flows and stock market sentiment, often create the best entry points for assets with strong fundamentals.
Bitcoin’s underlying value comes from its scarcity—there will only ever be 21 million coins—and its role as a hedge against inflation and centralized control. I’ve seen how it’s held up during past economic crises, and I’m confident it’ll do the same in the future. Right now, with Bitcoin following the $SPY and $QQQ downward, I think we’re seeing a temporary misalignment. The ETF-driven selling is creating a discount, and I’m looking to buy the dip before the market realizes Bitcoin’s true worth again.
What to Watch on Thursday and Friday
Today, Thursday, April 10, 2025, we’ve got some big events that could keep the pressure on Bitcoin and stocks. The US Initial Jobless Claims data is out, and if it shows a weaker labor market, I expect more selling in $SPY and $QQQ, which could pull $BTC down further. The US CPI for March is also being released, and I’m watching this closely. If inflation is higher than expected, markets might panic, thinking the Federal Reserve will tighten policy, and that could hit Bitcoin hard through its correlation with stocks.
Tomorrow, Friday, April 11, 2025, we’ve got the US PPI for March, which shows wholesale inflation. I think this is a key number because if costs are rising for producers, it might fuel more inflation fears, putting pressure on $SPY and $QQQ—and by extension, $BTC. The University of Michigan’s Consumer Sentiment Index for April is also coming out, and I’m curious to see how people are feeling about the economy. If sentiment is low, it could mean less consumer spending, which might drag stocks down and take Bitcoin with them.
My Take: Buy the Dip, Focus on Bitcoin’s Core Value
I’ve been through enough market cycles to know that these dips are often the best times to buy. Bitcoin’s correlation with stock indices like $SPY and $QQQ is a short-term phenomenon driven by the power of ETFs, not a reflection of its core value. I’m looking at this as a chance to buy $BTC at a discount, because I believe its fundamentals—scarcity, decentralization, and inflation resistance—will shine through once the market stabilizes. I’d love to hear your thoughts on this strategy as we navigate these choppy markets!
