Fed Paper Finds Bitcoin, Ethereum Increasingly Track US Macro Signals Since 2021

Bitcoin (BTC) and Ethereum (ETH) are no longer trading in a self-contained crypto bubble. A new Federal Reserve research paper argues that, since 2021, major digital assets have begun absorbing U.S. macroeconomic news—rate decisions, inflation prints, and jobs data—much like U.S. equities, reshaping the long-running debate over whether crypto is insulated from traditional markets.

The study, released quietly in March by three economists affiliated with the U.S. Federal Reserve, examines how cryptocurrencies respond to key economic releases including Federal Open Market Committee (FOMC) decisions, the Consumer Price Index (CPI), and nonfarm payrolls (NFP). Using minute-by-minute trading data spanning 2015 to 2025, the authors find a clear break in behavior: before 2020, crypto’s reaction to these events was statistically weak; after 2021, volatility and trading activity surged immediately following macro announcements, with prices typically incorporating new information within roughly 15 to 30 minutes—comparable to the speed seen in U.S. Treasury markets.

That timing matters because it challenges the lingering view of crypto as a persistently ‘inefficient market’ driven mainly by retail flows and narrative momentum. Instead, the paper suggests that in today’s market structure, BTC and ETH often behave like high-beta risk assets whose short-term direction is increasingly tied to the path of U.S. monetary policy.

One of the paper’s central results is stark: when macro surprises imply tighter policy—higher-than-expected CPI or stronger-than-expected employment—BTC and ETH tend to fall immediately. A one-standard-deviation upside surprise in headline CPI is associated with an estimated 29–30 basis point drop in Bitcoin and a larger 43–46 basis point decline in Ethereum. By comparison, the S&P 500 falls about 19 basis points on a similar shock, highlighting what the authors describe as crypto’s outsized sensitivity to repricing in the discount rate.

The mechanism is familiar to equity and rates traders. Strong growth and sticky inflation increase the probability of a more hawkish Fed reaction function. Higher expected rates raise discount rates across risk assets, and assets with cash flows further out in time—so-called long-duration exposures—tend to take the hardest hit. The paper frames BTC and ETH as particularly exposed because they lack conventional cash flows such as earnings or dividends, leaving valuation more dependent on investor expectations and financial conditions.

The findings also undercut the popular ‘digital gold’ narrative, at least in the context of short-horizon macro news. The authors compare crypto’s macro-news sensitivity to other markets and report that BTC and ETH move in close tandem with U.S. stocks during these events. In their analysis, the time-series correlation between crypto and the S&P 500’s responses averages around 0.88–0.89, while gold and major currencies such as the euro and yen show the opposite tendency—often becoming less sensitive when crypto becomes more sensitive, and vice versa.

That pattern, the paper argues, looks less like a safe-haven profile and more like a leveraged version of equity risk: when monetary conditions tighten, crypto reacts in the same direction as stocks, but with larger amplitudes.

The regime change is also visible in the labor market data. Around 2020, the sign of Bitcoin’s response to employment surprises flips—strong payrolls, once associated with upside for BTC, later becomes a negative impulse. The paper notes that this mirrors a well-known equity-market paradox in tightening cycles: ‘good’ economic news can be ‘bad’ for risk assets when it increases the likelihood of restrictive policy.

Why 2021? The authors point to ‘institutional demand’ and the market microstructure shift that came with it. The 2020–2021 period was marked by high-profile adoption signals from hedge funds and asset managers, and the paper links that wave to changes in how information gets embedded into prices. Using an ‘order flow’ framework—measuring the ‘price impact’ of buy and sell pressure—the researchers find that after macro releases, trades began carrying more informational content, moving prices more forcefully than before. The effect is especially pronounced on offshore venues such as Binance and OKX, where the post-announcement increase in order-flow price impact becomes statistically meaningful only after 2021.

The implication is that more sophisticated players are increasingly dominating the first moments after an economic release—precisely when markets are most sensitive and spreads can widen. In the paper’s telling, this is the same structural feature long observed in mature rates markets: public information may be widely available, but not all participants react with equal speed or precision.

Coinbase, by contrast, shows a different early pattern in the pre-2021 period, with net buying sometimes coinciding with price declines—an outcome consistent with contrarian retail positioning and less disciplined execution. The post-2021 results, however, suggest that this retail-driven signature has faded in importance relative to institutional-style trading around macro catalysts.

For global crypto investors, the broader message is straightforward: Bitcoin is increasingly a macro asset. In practical terms, the ‘macro calendar’—FOMC dates, CPI release times, and U.S. jobs reports—has become an essential part of understanding near-term crypto volatility, with the 15–30 minutes surrounding releases emerging as a recurrent stress window for liquidity and price discovery.

The paper’s conclusions are also a caution against simplistic inflation-hedge assumptions. If upside inflation surprises reliably pressure BTC and ETH through the interest-rate channel, then crypto may be less of a shield against inflation shocks and more of a participant in the same ‘risk repricing’ dynamics that drive equities.

Ultimately, the Fed economists’ work frames the post-2021 crypto market as more integrated—with U.S. monetary policy, with institutional trading behavior, and with the broader rhythm of global risk assets. In that environment, when Federal Reserve officials signal a shift in the policy outlook, crypto markets are increasingly listening—and reacting—alongside everything else.