Bitcoin less sensitive to rates? Post-ETF, correlation with monetary policy weakens

An analysis suggests that Bitcoin (BTC) is becoming less closely linked to monetary policy in major economies, including the US Federal Reserve (Fed).

On the 5th (local time), Binance Research, cited by CoinDesk, assessed that it is increasingly likely Bitcoin no longer moves in line with interest-rate policy. It pointed to post-launch changes in market structure following the introduction of spot exchange-traded funds (ETFs) as a key driver.

In the past, the pattern was clear: when central banks tightened, Bitcoin tended to fall, showing heightened sensitivity to rate signals. However, since 2024 the correlation between Bitcoin and global monetary-easing indicators appears to have weakened markedly.

The indicator in question is the Global Easing Breadth Index, which reflects the monetary-policy stance of 41 central banks. Before ETFs were introduced, Bitcoin showed a moderate positive (+) correlation with the index, moving in a similar direction with a lag of several months.

After ETF approval, by contrast, the correlation shifted decisively into negative (-) territory, with an inverse relationship roughly three times stronger than before, the report said.

The change is attributed to a shift in the mix of market participants. Previously, retail investors dominated and tended to react immediately to macroeconomic news; after ETFs were introduced, a larger share of institutional money has altered price formation, according to the analysis.

Binance Research explained: "Bitcoin may have shifted from an asset that follows the macro environment to one that prices it in ahead of time," adding that "the peak in monetary easing may already be priced in, and crypto-specific factors such as policy progress or institutional flows could become more important."

With stagflation fears resurfacing amid rising oil prices and geopolitical tensions in the Middle East—sparking talk of possible rate hikes—another view is that the impact of such macro variables could be more limited than in the past.

Citing historical precedents, Binance Research added that central banks are likely to eventually pivot policy toward prioritizing growth defense, and that Bitcoin may preemptively price in such a shift.