does crypto go up when stocks go down — Explained

does crypto go up when stocks go down — Brief answer

does crypto go up when stocks go down is a common question for investors who want to know whether digital assets act as a hedge or safe haven vs. equities. Short answer: there is no consistent rule. Crypto sometimes falls with stocks, sometimes diverges, and only occasionally rises while equities fall. Correlations vary over time and across episodes depending on macro conditions, liquidity, leverage, institutional flows and crypto-specific events.

This article explains why the answer to “does crypto go up when stocks go down” is context dependent, reviews historical patterns, describes the drivers that strengthen or weaken crypto–stock links, covers how correlations are measured and limited, and gives practical evaluation steps investors can use. It draws on research and market reports (see References) and includes market evidence current to Jan 22, 2026.

Overview

The question does crypto go up when stocks go down matters because many investors want uncorrelated or negatively correlated assets to reduce portfolio drawdowns. Over the past decade correlation between major cryptocurrencies (especially Bitcoin) and equity markets has changed. Early years showed weak or idiosyncratic links; the pandemic and post‑2020 rally made crypto behave more like a risk‑on asset closely tracking technology and growth indices; and mid‑2020s data shows intermittent decoupling where crypto sometimes diverged from stocks.

As of Jan 22, 2026, reports such as CoinDesk’s institutional coverage (Chart of the Week: Bitcoin–Gold correlation) and academic/industry work show that correlations are time‑varying. That means the simple rule “does crypto go up when stocks go down” has no universal yes/no answer — the relationship depends on the episode and market structure at the time.

Historical correlation patterns between crypto and equities

To answer “does crypto go up when stocks go down” we need history. The relationship has evolved through distinct regimes rather than remaining fixed.

Early years and pre‑2020 behavior

In the period before 2020, crypto prices were driven largely by retail flows, project‑specific news, token launches, hacks, and localized liquidity events. Bitcoin and many altcoins showed weak and inconsistent correlations with global equity indices. During that time, asking “does crypto go up when stocks go down” was often irrelevant because crypto moves were idiosyncratic — a regulatory announcement for a token or a major hack could move crypto independently of equities.

Pandemic era and higher correlation with risk assets (2020–2023)

From the market dislocation in March 2020 through the subsequent stimulus-fueled rally, crypto increasingly behaved like a risk‑on asset. Institutional entry, large-scale macro liquidity, and the emergence of Bitcoin and Ethereum as investable assets led to higher positive correlation with equities — particularly technology‑heavy indices. During extended risk‑on periods, both stocks and crypto rose; during large risk‑off moves, both often fell together. This era is a key reason many investors now ask “does crypto go up when stocks go down” — because in this regime the answer tended to be “no.”

Downturns and episodic divergence (e.g., 2018, 2022)

There have been episodes when crypto acted worse than equities (e.g., the 2018 crypto bear market and the 2022 macro/crypto stress cycles). In 2022, crypto experienced outsized drawdowns partly driven by crypto‑native leverage, contagion among lending/leveraged platforms, and regulation — again showing that crypto does not reliably rise when stocks fall. Conversely, there were isolated times when crypto diverged from equities: single‑day selloffs where BTC held up while equities fell, or periods where idiosyncratic positive crypto news produced gains when global risk appetite weakened.

Recent shifts and partial decoupling (mid‑2020s to early 2026)

More recent market structure changes — tokenization progress, 24/7 trading access, institutional products like spot Bitcoin ETFs and improved custody — have altered how capital moves between markets. As CoinDesk reported (Chart of the Week, Jan 2026), Bitcoin’s 30‑day rolling correlation with gold turned positive in early 2026, highlighting shifting cross‑asset relationships. Bloomberg and other market reports in 2025–2026 observed intermittent decoupling episodes where crypto moved independently from tech stocks, sometimes rising while equities fell. These shifts mean the answer to “does crypto go up when stocks go down” depends on whether institutional cross‑market flows or crypto‑specific drivers dominate at that time.

Why correlations change — key drivers

Correlation between crypto and equities is not fixed. The following factors explain when the answer to "does crypto go up when stocks go down" might tilt one way or another.

Market risk sentiment and “risk‑on / risk‑off”

In risk‑on environments, leverage and speculative capital allocate to higher‑beta assets: equities and many crypto tokens. In risk‑off episodes, both may sell off. When market sentiment drives both classes, crypto rarely rises when stocks fall. However, if traditional markets suffer due to specific macro shocks while crypto markets benefit from a different narrative (e.g., monetary instability driving demand for crypto), crypto can move opposite to equities.

Liquidity, leverage, and margin/derivative flows

Crypto markets have historically had concentrated liquidity and leverage zones. Forced deleveraging or cross‑market margin calls can cause rapid, simultaneous declines across assets. Conversely, when on‑chain liquidity, stablecoin buffers, and institutional limit orders are deep, crypto can absorb flows differently. Because leverage magnifies moves, episodes of deleveraging often make crypto fall with stocks — answering “does crypto go up when stocks go down” in the negative for those episodes.

Macro factors (monetary policy, inflation, US dollar)

Interest‑rate policy, central bank liquidity, inflation expectations and the US dollar’s strength affect both equities and crypto. For example, a surprise easing cycle can lift risk assets; higher real rates often pressure both equities and some crypto assets. If crypto becomes seen as an inflation hedge or a non‑dollar store of value, it may sometimes rise while stocks fall, but this has not been reliably observed across long samples.

Institutional adoption, ETFs, and capital flows

Institutional products (spot BTC ETFs, large custodial mandates, tokenized securities) create stable, large flows that tie crypto performance to traditional market allocation decisions. When institutions rebalance portfolios in multi‑asset strategies, cross‑asset correlation tends to increase. That means during periods of strong institutional commonality, the answer to “does crypto go up when stocks go down” is less likely to be yes.

Crypto‑specific events (regulation, hacks, halving, protocol upgrades)

Crypto markets respond to events that have no analogue in equities: protocol upgrades, network outages, major hacks, or halving schedules. Positive crypto‑specific news (e.g., major upgrade success, institutional adoption announcements) can lift crypto even if stocks fall, providing isolated counter‑examples to “does crypto go up when stocks go down.”

Asset differences — Bitcoin vs. altcoins vs. crypto‑related equities

Not all digital assets behave the same. When considering “does crypto go up when stocks go down,” distinguish among categories:

• Bitcoin: Often discussed as a “digital‑store‑of‑value” candidate, Bitcoin has had phases where it tracked risk assets and phases where it behaved differently. It is the most liquid crypto and therefore most subject to institutional flows.

• Major altcoins (e.g., large smart‑contract platforms): These often have higher beta relative to Bitcoin and historically show stronger positive correlation to crypto risk appetite — so they are less likely to rise when stocks fall, except in rare idiosyncratic cases.

• Crypto‑related equities (miners, infrastructure stocks): These can correlate with either equity markets or crypto prices depending on revenue exposure, regulatory environment, and index membership. They do not offer a simple hedge if equities weaken.

Measuring correlation — methods and limitations

To understand whether “does crypto go up when stocks go down” is true at a given time, analysts use statistical measures:

• Pearson correlation: Measures linear correlation across returns over a fixed sample.
• Rolling/window correlation: Shows how the correlation changes over time (e.g., 30‑day or 90‑day rolling correlation).
• Time‑varying models: GARCH, DCC (dynamic conditional correlation) and state‑space models capture changing relationships under volatility.

Limitations:

• Non‑stationarity: Financial return series change regimes; correlation estimates can be unstable.
• Window sensitivity: Short windows respond to recent shocks but are noisy; long windows smooth but lag regime shifts.
• Correlation ≠ causation: A correlation does not prove one asset causes moves in another.
• Tail dependence: Linear correlation misses how assets co‑move in extremes; copula or tail‑dependence metrics better capture joint crash risk.

Empirical findings and notable reports (short summaries)

• WisdomTree — "DYNAMIC CORRELATIONS: BITCOIN VS. OTHER ASSET CLASSES": documents that Bitcoin has often behaved like a risk‑on asset and highlights calendar‑year variability in returns. It shows years where Bitcoin outperformed and years where it lagged equities.

• Bloomberg (Apr 2025) — reported signs that Bitcoin’s correlation with tech stocks showed episodes of breaking down, indicating potential partial decoupling in 2025.

• CoinDesk / Citi reporting (via CoinDesk) — highlighted that correlations can tighten again during renewed volatility; institutional flows and volatility pulses can re‑link assets.

• Investopedia, Trust Wallet and Equiti — provide primers showing that correlation exists but is variable, and lay out the drivers discussed above.

• Fidelity and other institution primers — emphasize macro drivers and how institutional adoption changes cross‑asset dynamics.

As of Jan 22, 2026, CoinDesk noted that Bitcoin’s 30‑day rolling correlation with gold flipped positive (0.40) in early 2026, reflecting evolving relationships across safe‑haven assets and digital assets. (Source: CoinDesk, Jan 2026.)

Implications for investors and portfolio construction

Because the simple answer to "does crypto go up when stocks go down" is generally “no,” investors should:

• Treat crypto as a distinct, high‑volatility asset class rather than a reliable hedge.
• Use appropriate allocation sizing: small, risk‑budgeted exposures are prudent given tail risk and idiosyncratic shocks.
• Diversify within crypto (different networks, stable value instruments) and across traditional assets.
• Stress‑test portfolios for joint drawdowns (equity + crypto) rather than assuming negative correlation.
• Consider hedging tools designed for downside protection (options, short strategies) rather than relying on natural negative correlation.

All recommendations above are educational and not financial advice.

How to evaluate crypto as a hedge during a stock downturn — a practical checklist

If you want to test whether “does crypto go up when stocks go down” might hold in a given episode, monitor the following indicators:

1. Rolling correlations: Check 30‑day and 90‑day rolling correlation between Bitcoin/selected altcoins and major equity indices.
2. Market liquidity: On‑chain liquidity metrics (stablecoin balances on exchanges), order book depth, and bid/ask spreads.
3. Leverage indicators: Open interest in futures, perpetual funding rates, and margin levels on institutional venues.
4. Flow data: ETF inflows/outflows, custodian large deposits/withdrawals, and stablecoin movement patterns.
5. Macro signals: Fed rate moves, dollar index trends, and inflation surprises.
6. Crypto‑specific risk events: Regulatory announcements, major protocol upgrades or security incidents.
7. News and sentiment: Institutional press releases and large treasury allocations by corporates or funds.

If most indicators point to a broad risk‑off with high leverage and thinning liquidity, crypto is more likely to fall with stocks. If macro drivers favor a non‑dollar store of value narrative while crypto flows are positive and leverage is low, crypto may diverge and potentially rise.

Examples of episodes where crypto rose while stocks fell

When answering “does crypto go up when stocks go down,” it’s useful to catalog select episodes — but avoid overgeneralizing from single events.

• Single‑day rotations: There have been days when BTC gained while U.S. indices fell, often driven by flows into stablecoins and crypto ETFs or by crypto‑specific positive news.
• Mid‑2020s decoupling episodes: Market reports in 2025 documented intermittent patchy decoupling where Bitcoin rose during equity weakness due to inflows into spot BTC ETFs and rotation from tech equity into digital assets. These were episodic and did not represent a permanent regime shift.

Each example must be interpreted in context: liquidity, leverage, and the dominant flow drivers (macro vs. crypto‑specific) determine outcomes.

Limitations and caveats

• Past behavior is not a guarantee of future performance. The historical answer to "does crypto go up when stocks go down" can change as markets evolve.
• Small sample and regime bias: Crypto’s multi‑regime history is still short relative to traditional asset classes, making robust statistical inference hard.
• Data quality: Exchange data, on‑chain metrics, and reported volumes can vary in reliability; always cross‑check multiple sources.
• No universal hedge: For most practical portfolio horizons, crypto should not be relied on as a systematic hedge to equity declines.

Practical workflow for investors who want to monitor correlation in real time

1. Set up dashboards that show rolling correlations (30/90/180 days) for BTC, ETH and a basket of altcoins vs. S&P 500 and Nasdaq.
2. Track on‑chain liquidity: stablecoin totals on‑exchange, large wallet inflows/outflows, and exchange reserve changes.
3. Watch derivative markets: open interest, funding rates, and liquidations.
4. Monitor institutional flow proxies: ETF flows, custody inflows, and OTC desk volumes.
5. Maintain scenario playbooks: decide in advance what actions to take if correlation exceeds a threshold or if liquidity indicators deteriorate.

See also

• Safe‑haven assets and how they differ from hedges
• Market correlation and time‑varying dependence
• Bitcoin ETFs and institutional adoption
• Hedging strategies and risk management best practices

Examples of relevant data points (quantifiable metrics)

• As of Jan 22, 2026, CoinDesk reported Bitcoin’s 30‑day rolling correlation with gold at approximately +0.40 for the first time in 2026 (CoinDesk, Jan 2026).
• WisdomTree and other index analysis show calendar‑year variability in Bitcoin returns, including years where BTC outperformed equities and years where it lagged.
• Typical short‑term (30‑day) BTC–S&P 500 correlations have ranged historically from strongly positive (~0.6) to near zero or slightly negative in isolated windows, illustrating the non‑stationary behavior.

Sources for the numbers above are listed in References; readers should consult primary reports for exact tables and time series.

References (selected)

• “DYNAMIC CORRELATIONS: BITCOIN VS. OTHER ASSET CLASSES” — WisdomTree (research report).
• “Bitcoin’s Correlation With Stocks Shows Signs of Breaking Down” — Bloomberg (Apr 2025 reporting).
• “Does the Stock Market Affect the Crypto Market?” — Trust Wallet (explainer summary).
• “The crypto and stock market correlation: Do they move together?” — Equiti (overview).
• “Citi Says Crypto’s Correlation With Stocks Tightens as Volatility Returns” — reported by CoinDesk (coverage of Citi analysis).
• “Cryptocurrency and Stock Market: Are Their Prices Correlated?” — Investopedia (primer).
• “What makes crypto go up and down?” — Fidelity Learning Center (primer on drivers).
• CoinDesk institutional newsletter and chart commentary — cited for the Jan 2026 rolling correlation observation (As of Jan 22, 2026, according to CoinDesk reporting).

Note: dates accompany each source in the original publications; consult primary source publications for precise figures and charts.

Final notes and next steps

If you came here wondering “does crypto go up when stocks go down,” you should now understand that the relationship is variable and context dependent. For practical portfolio work:

• Monitor rolling correlations and liquidity in real time.
• Use disciplined allocation and risk sizing rather than assuming natural hedging properties.
• Consider custody, execution and analytics infrastructure that supports continuous market monitoring — for trading and custody, consider Bitget and Bitget Wallet as options that prioritize capability and security.

To explore trade execution, market data feeds, or custody services for your crypto allocation, visit Bitget’s product pages or open a Bitget Wallet to trial secure custody (educational resources only; this is not investment advice).

Abstract: does crypto go up when stocks go down? There is no consistent rule — correlations change with market regimes. Use measured allocation, monitor rolling correlations and liquidity, and prioritize reliable execution and custody such as Bitget and Bitget Wallet when trading or storing digital assets.