For years, Bitcoin was the wild west of financial markets — completely detached from stocks, moving on its own cycle, and reacting to a different set of catalysts.
But look at a Bitcoin chart today, and it’s starting to resemble the S&P 500. That’s not a coincidence, and it’s not just because “institutions are buying in.”
There’s a structural reason behind this shift, and it all comes down to futures.
When Bitcoin first launched, there was no way for large institutions to trade it through traditional markets. If they wanted exposure, they had to own it directly — which meant dealing with crypto exchanges, wallets and all the security risks that came with it.
That changed in December 2017, when Bitcoin futures started trading on the CME. Suddenly, hedge funds, market makers and algorithmic traders could treat Bitcoin like any other asset, using leverage and shorting it without ever touching the underlying coin.
Here’s where it gets interesting…
The same market makers that provide liquidity for S&P 500 futures are also making markets for Bitcoin futures. And when a security is primarily traded through futures, it stops moving based on natural buying and selling — and instead moves based on arbitrage.
Think about it.
The S&P 500 futures contract (ES) is just a derivative of the index itself, which is a derivative of 500 individual stocks. The futures market doesn’t determine what Apple (AAPL), Microsoft (MSFT) or Nvidia (NVDA) do — the actual stock trading does.
Futures just track the movement. Now apply that same logic to Bitcoin.
The spot market still exists, but futures trading has become dominant. Market makers arbitrage the difference between spot Bitcoin and its futures, just like they do with stocks.
And who’s setting those futures prices?
The same firms making markets for the S&P 500. So when the S&P 500 rallies, Bitcoin rallies. When stocks sell off, Bitcoin sells off.
It’s not because Bitcoin is suddenly tied to corporate earnings or economic data — it’s because the same firms are pricing both markets, and they’re using the same trading infrastructure to do it.
This is why volume-based indicators are useless on Bitcoin now. In the early days, technical traders could rely on volume spikes to confirm breakouts. But in a futures-driven market, volume doesn’t represent real buying and selling — it’s just synthetic liquidity created by arbitrage.
If you’re trading Bitcoin, you need to think like a futures trader.
Look at how liquidity moves, not just price action. And if you want to know where Bitcoin is headed, don’t just look at crypto charts — watch the S&P 500.
Because like it or not, Bitcoin is now part of the same machine.
I hope that helps!
Roger Scott
Roger Scott Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Discover how to Better Use Your Monday
Hidden within what looks like random lines of numbers lies one of the most powerful market forces ever discovered.
I call it the “Weekly Turnaround” — and it works in a remarkably simple way:
- Open a basic trade at one specific time on Monday…
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And that’s it!
