Bitcoin Volatility Closely Tracks Wall Street as VIX Correlation Hits All-Time High
Bitcoin’s (BTC) volatility metrics are now more aligned with traditional equity markets than ever before, as institutional players reshape the crypto landscape.
According to TradingView data, the 90-day correlation between Bitcoin’s 30-day implied volatility—captured by indices such as Volmex’s BVIV and Deribit’s DVOL—and the S&P 500’s VIX surged to a record 0.88 earlier this month. While the figure has slightly eased to 0.75 as of Wednesday, the elevated correlation marks a significant shift in how BTC responds to broader market sentiment.
A correlation coefficient of 0.88 signals a strong relationship between the two metrics. The VIX, often dubbed Wall Street’s “fear index,” measures expected 30-day volatility in the S&P 500 and tends to rise during periods of market stress.
Historically, BTC’s volatility moved independently of equities. But that dynamic appears to be changing. The BVIV index has dropped from around 67% to 42% in 2025—mirroring a broader risk-on environment—as Bitcoin’s price has climbed 26% year-to-date. Meanwhile, the VIX has declined 11%, while the S&P 500 is up more than 8%.
Markus Thielen, founder of 10x Research, attributes this convergence to the growing presence of institutional investors in crypto markets, many of whom are employing traditional volatility-selling strategies.
“Wall Street continues to dominate this bitcoin cycle,” Thielen told CoinDesk. “Institutional traders are increasingly selling call options to generate yield, rather than taking directional bets. That suppresses volatility and links crypto to traditional market patterns.”
This “volatility compression,” as Thielen calls it, mirrors income-generating strategies in equity markets, where investors sell out-of-the-money options to enhance returns. As more hedge funds and asset managers apply these tactics to crypto, Bitcoin’s behavior is becoming increasingly intertwined with macroeconomic cycles and traditional market flows.
“The result is greater alignment with risk-on and risk-off dynamics familiar to legacy investors,” Thielen added.
The institutionalization of crypto is now unmistakable. As the same playbook is deployed across asset classes, Bitcoin’s volatility is no longer isolated—it’s becoming just another variable in Wall Street’s risk equation.
