Gold skyrocketed, breaking through 3450 USD. Can Bitcoin break free from the "tightening spell" of US stocks?

Written by: Luke, Mars Finance

On April 22, 2025, there was a "risk-off frenzy" in financial markets. The spot gold price broke through $3,450 per ounce in one fell swoop, hitting an all-time high, and has risen by more than $820 for the year. At the same time, New York gold futures broke through the $3,500 mark, and the market was "one step away" from spot gold. And Bitcoin (BTC), an asset known as "digital gold", can get rid of the high correlation with U.S. stocks and get out of its own independent trend like gold? This article will start with the upward logic of gold and combine the correlation trend between Bitcoin and gold to explore this issue in depth.

The "Madness" of Gold: The "Waterloo" of Dollar Credit

The surge in gold prices is like a signal flare, illuminating the dark corners of global financial markets. On April 22, spot gold broke through $3,450 per ounce, up 0.76% during the day, and rose more than $820 for the year. New York gold futures broke through the $3,500 mark, showing a strong upward momentum. Many people's first reaction may be: geopolitical conflict again? The situation in Ukraine, the turmoil in the Middle East, the escalation of global tensions...... These "old friends" always seem to be able to light a fire for the price of gold.

However, the reality is far from simple. Historical data shows that local conflicts, regional frictions, and even prolonged stalemates have a relatively limited impact on gold prices. What truly causes gold prices to "skyrocket" is often systemic, global risk. This time, behind the crazy rise in gold, the real driving force is the collapse of the dollar's credit.

The US dollar, as the cornerstone of the global financial system, has weathered countless crises for decades thanks to its resilience. However, today, this cornerstone is visibly loosening at an alarming rate. The total amount of money in the global monetary system (whether M1 or M2) is astronomical, and even if only 1% of investors lose their trust in the dollar, the scale of funds released by their "voting with their feet" would be enough to shock the market. Once this crack in trust forms, it will spread rapidly, triggering violent flows of capital. Gold, as the oldest and most stable safe-haven asset in human history, naturally becomes the biggest beneficiary in this crisis of trust.

More specifically, the collapse of dollar credit is closely related to the current macroeconomic environment. Citibank's latest forecast indicates that the Federal Reserve may cut interest rates for the first time in June this year, with a total of up to five cuts throughout the year, bringing the federal funds rate down from the current 4.25%-4.5% to 3%-3.25% by the end of 2025. This forecast reflects signs of weakness in the U.S. economy, as the Federal Reserve's policy focus shifts from combating inflation to supporting the economy and stabilizing employment. Expectations of interest rate cuts typically weaken the dollar's appeal, driving funds toward safe-haven assets like gold.

In addition, Trump's continued pressure on Federal Reserve Chairman Powell has exacerbated market uncertainty. KCM Trade's chief market analyst Tim Waterer pointed out: "Amid concerns over tariffs and the controversy between Trump and Powell, investors are shying away from U.S. assets, and gold is fully capitalizing on the dollar's predicament." This high level of economic uncertainty has become a "catalyst" for the surge in gold prices.

Bitcoin and Gold: Former "Close Allies"

The rise of gold is in full swing, and as "digital gold," can Bitcoin also share a piece of the pie in this wave of risk aversion? To answer this question, we need to first take a look at the correlation trend between Bitcoin and gold prices.

A chart from TheNewHedge clearly shows the 30-day rolling correlation between Bitcoin (BTC) and Gold (XAU) over the past five years (as shown in the figure below). In the chart, the gray line represents the price of Bitcoin, the orange line represents the price of Gold, and the blue line indicates the correlation coefficient between the two. From 2020 to 2025, the correlation between Bitcoin and Gold experienced significant fluctuations, but overall displayed a trend of "first high then low."

Between 2020 and 2022, the correlation between Bitcoin and gold approached 0.5 at one point, indicating a strong positive correlation at certain stages. During this period, Bitcoin was viewed by the market as a candidate for a "safe-haven asset," especially amid the global economic turmoil triggered by the pandemic, where investor distrust in traditional financial systems propelled the simultaneous rise of Bitcoin and gold. However, starting in 2022, the correlation began to decline, particularly after 2023, as the blue line repeatedly fell to 0 or even into negative territory, showing a gradual divergence in the trends of Bitcoin and gold.

Behind this divergence, the high correlation between Bitcoin and U.S. stocks is a key factor. In recent years, the price of Bitcoin has shown a significant increase in its correlation with the Nasdaq index, especially during the bull and bear market cycles of U.S. stocks in 2021 and 2022, where Bitcoin almost became a "shadow asset" of tech stocks. When U.S. stocks rise, Bitcoin often follows; when U.S. stocks fall, Bitcoin also struggles to stand alone. This "tightening spell" has greatly reduced Bitcoin's safe-haven attributes, making it far less "distinctive" than gold.

Can Bitcoin "break out of its cocoon": Is it moving towards an independent trend?

Back in 2025, the price of Bitcoin has broken through the $100,000 mark, showing strong upward momentum. Looking at the chart, the correlation between Bitcoin and gold has picked up in the second half of 2024, especially after gold broke above $3,000 per ounce, and the two moved in sync again. Does this phenomenon mean that Bitcoin is freeing itself from the shackles of US stocks and returning to its role as a "safe-haven asset"?

The answer may be "possible, but further observation is needed." On one hand, the collapse of the dollar's credit and the uncertainty of the global economy provide Bitcoin with the opportunity to "dance" alongside gold. The declining trust in the dollar not only drives up gold prices but also enhances the appeal of Bitcoin as a decentralized asset. Especially in the context of expectations for a Federal Reserve rate cut, liquidity easing may further stimulate the rise of risk assets like Bitcoin.

On the other hand, the correlation between Bitcoin and the US stock market has not completely disappeared. At the beginning of 2025, the US stock market still shows an upward trend driven by technology stocks, and Bitcoin's rise is still somewhat boosted by the sentiment of the US stock market. If the US economy shows signs of weakness in June as Citigroup predicts, the US stock market may face a correction, and whether Bitcoin can "stand alone" remains an unknown.

More importantly, for Bitcoin to truly break out of its independent trend, it needs to undergo a "identity transformation" in market perception. The reason gold can stand firm during a crisis is that it has accumulated thousands of years of "safe-haven consensus" in human history. Although Bitcoin is hailed as "digital gold", it has only been around for 16 years and is still viewed by many investors as a high-risk asset. To break free from the "tightening spell" of the US stock market, Bitcoin needs to prove its safe-haven value in more global crises.

The Future of Gold and Bitcoin: The Dawn of a New Order?

The surge in gold reveals a profound signal: the dollar-dominated international monetary system is facing an unprecedented crisis of trust. Whether it's the Federal Reserve's interest rate cut expectations or the policy game between Trump and Powell, all are accelerating this process. Meanwhile, Bitcoin, as a decentralized "new force," stands at a historical crossroads.

In the short term, gold still has room to rise. Tim Waterer mentioned that despite the rapid increase in gold prices this month, a pullback is possible; however, economic uncertainty will still attract buyers. In contrast, Bitcoin's trend may be more complex: it may rise alongside gold due to risk aversion, but it may also be pressured by adjustments in the U.S. stock market.

In the long run, if Bitcoin wants to become a true "digital gold", it requires dual validation from time and the market. Perhaps we are witnessing the end of an era - the twilight of dollar hegemony; at the same time, it is also the beginning of a new order - the dawn where gold and Bitcoin shine together.