Crypto’s Ties to Global Markets Are Now ‘Complete,’ Says Pi42 CEO
Bengaluru, India – The integration of cryptocurrency markets with traditional global finance has reached a state of completion, according to Avinash Shekhar, Chief Executive of crypto derivatives exchange Pi42. In a statement issued on March 21, 2025, Shekhar argued that digital assets are no longer a fringe asset class but a fully integrated component of the global financial system, moving in lockstep with equities, bonds, and currencies.
“The era of crypto as an isolated, uncorrelated asset is over,” Shekhar said. “We are now seeing a complete interconnection. Bitcoin and other major digital assets react to the same macroeconomic forces—interest rate decisions, inflation data, geopolitical events—that drive traditional markets.”
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Shekhar’s remarks come amid a period of heightened correlation between Bitcoin and the Nasdaq 100, which has hovered near multi-year highs in recent weeks. Data from CoinMetrics shows the 90-day rolling correlation between Bitcoin and the S&P 500 has consistently remained above 0.6 since late 2024, a level historically associated with deep market integration.
Institutional Adoption Driving the Shift
Shekhar pointed to the growing involvement of institutional investors as a primary driver of this convergence. The approval of spot Bitcoin exchange-traded funds (ETFs) in the United States in January 2024 opened the door for pension funds, hedge funds, and asset managers to allocate capital to digital assets through regulated channels. By early 2025, net inflows into U.S. spot Bitcoin ETFs had surpassed $35 billion, according to data from Bloomberg Intelligence.
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“When institutions enter a market, they bring their trading strategies, risk management frameworks, and correlation analysis,” Shekhar explained. “They don’t treat crypto as a separate universe. They treat it as another sector within a diversified portfolio. That fundamentally changes how the asset behaves.”
The trend is not limited to the United States. In Asia, regulators in Hong Kong and Singapore have moved to create clearer frameworks for digital asset trading, while the European Union’s Markets in Crypto-Assets (MiCA) regulation, which came into full effect in December 2024, has provided a unified legal structure for the bloc’s 27 member states.
Macro Factors Now Dominate Crypto Price Action
The increased correlation means that macroeconomic events now drive crypto prices as much as, if not more than, crypto-specific news. The Federal Reserve’s interest rate decisions, U.S. employment reports, and consumer price index releases regularly trigger synchronized moves across Bitcoin, Ethereum, and major stock indices.
“A 25-basis-point rate cut by the Fed now moves Bitcoin just as predictably as it moves the S&P 500,” Shekhar noted. “Traders who ignore macro analysis when trading crypto are at a significant disadvantage.”
This shift has implications for retail investors who entered the crypto market seeking an asset class uncorrelated with stocks. During the 2022 bear market, Bitcoin’s drawdown closely mirrored that of the Nasdaq, challenging the narrative that crypto served as a hedge against traditional market downturns.
“The idea of crypto as ‘digital gold’ with zero correlation to equities was always overstated,” said James Butterfill, Head of Research at CoinShares, in a separate interview. “What we are seeing now is the natural evolution of a maturing asset class. As liquidity deepens and institutional participation grows, correlations with traditional markets will persist.”
Pi42’s Position in the Evolving Environment
Pi42, a derivatives exchange focused on the Indian market, has positioned itself to serve traders who need tools to manage this interconnected environment. The platform offers futures and options contracts on Bitcoin, Ethereum, and other major cryptocurrencies, with a focus on risk management features such as stop-loss orders and portfolio margin.
India’s crypto regulatory environment remains in flux. The country has not yet enacted comprehensive legislation for digital assets, though the government has imposed a 30% tax on crypto income and a 1% tax deducted at source (TDS) on transactions. Despite the tax burden, trading volumes on Indian exchanges have remained resilient, with Pi42 reporting a 40% increase in active users in the first quarter of 2025 compared to the previous quarter.
Shekhar expressed cautious optimism about regulatory progress. “We are engaging with policymakers to help them understand the market. The interconnection with global markets means that India cannot afford to be isolated. A clear, balanced regulatory framework would benefit both the industry and the broader economy.”
What This Means for Crypto Investors
For individual investors, the integration of crypto into the global financial system presents both opportunities and risks. On one hand, institutional involvement brings greater liquidity, more sophisticated trading products, and improved market infrastructure. On the other hand, it reduces the diversification benefit that crypto once offered as a non-correlated asset.
“Investors need to reassess their portfolio construction,” Shekhar advised. “If you are holding crypto purely for diversification, you may not be getting the hedge you expect. But if you are trading it as a high-beta exposure to global liquidity and technology adoption, the thesis remains strong.”
Shekhar also warned against assuming that correlation would remain static. “Markets evolve. The relationship between crypto and traditional assets will continue to shift as new factors emerge—regulatory changes, technological breakthroughs, or shifts in investor sentiment. The key is to stay informed and adaptable.”
