A new report published by Binance Research indicates that Bitcoin no longer moves in the same direction as the policies of the American Federal Reserve (FED). The report highlights a structural shift following the launch of spot Bitcoin exchange-traded funds (ETFs).
The impact of ETFs and the role of institutional investors
For many years, cryptocurrency markets have reacted sensitively to signals about interest rates. Especially the monetary tightening steps of central banks were causing rapid fluctuations in the price of Bitcoin. The picture began to change when the US Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs in 2024.
According to Binance’s analysis, Bitcoin’s correlation with the Global Easing Breadth Index, monitored by 41 different central banks, turned significantly negative by 2024. Before ETFs, Bitcoin closely followed periods of global monetary easing, reacting with a delay of several months. The new report finds that this relationship has now reversed and the effect is three times stronger than in the past.
Behind this change is the fact that institutions started to gain weight instead of individual investors. In previous years, Bitcoin and the overall crypto market were driven heavily by individual investors’ reactions to sudden macroeconomic developments. With the introduction of ETFs, institutional investors who set long-term strategies began to become more effective in pricing.
BTC may have ceased to be an asset affected by macro developments and turned into an instrument that pre-prices market expectations. Once a peak in monetary easing is reached, this could become a foregone conclusion for BTC, and crypto-specific headlines and institutional fund movements could play a more decisive role in the direction of easing policies.
Approach to Bitcoin in geopolitical and economic uncertainties
Global markets are facing stagflation concerns due to rising oil prices and ongoing conflicts in the Middle East. Interest rate expectations also varied in this environment; While markets were previously expecting a rate cut, recent developments have highlighted the possibility of a possible increase.
The latest report states that risky assets may remain under pressure in such volatile expectations, but Bitcoin may have broken out of old patterns with new investor dynamics.
In past cycles, central banks have moved to support growth even during periods of rising inflation. If a similar scenario occurs again, central banks may once again prioritize growth and Bitcoin may price this transformation expectation before the market.
As a result, institutional investor behavior, which has increased in Bitcoin pricing with ETF approval, seems to have reduced the impact of the FED and other central bank policies. It is predicted that Bitcoin’s sensitivity to macroeconomic data may differ from now on.
