Fidelity's director of global macro Jurrien Timmer said Bitcoin correlation with the S&P 500 rose last week as a market selloff pushed multiple asset classes into sync. On Thursday, Nov. 5, the S&P 500 fell 4.4% and the Nasdaq 100 dropped 6.4%, linked to bets that Democrats would regulate AI more tightly. Bitcoin fell 5.4% that day as the VIX jumped nearly 70%.
Timmer posted a 50-day chart on X showing the pattern. A basket of stocks excluding AI names moved from 10% to 40% correlated during the week. The equal-weight S&P 500, REITs, and Bitcoin also converged. Timmer wrote, "When markets fall hard and fast enough, correlations often converge, and we can see below that this happened last week as well."
The rising correlation matters because Bitcoin is meant to act as a diversifier, moving separately from stocks. When correlation increases, that diversification value erodes for holders.
Some assets held up better. The dollar and the Bloomberg Commodity Index remained at or below zero correlation to the S&P 500. Commodity Trading Advisors showed the same pattern. Grayscale research put Bitcoin's 90-day correlation with the Nasdaq 100 at roughly 33%, down from over 60%.
Timmer listed Bitcoin, gold, and commodities among his diversifiers in Fidelity's December outlook.