Bitcoin and Copper Tumble in Tandem, Signaling Crypto's Shift Toward Macro Risk Asset

By Michael Turner | Senior Markets Correspondent

In a striking display of market synchronization, Bitcoin's sharp drop below $78,000 on January 30 was mirrored by a steep decline in copper, gold, and other key commodities. The base metal, often hailed as "Dr. Copper" for its economic forecasting prowess, fell nearly 4% from a record high above $14,500 per ton reached just hours earlier. This parallel movement reinforces a growing consensus among analysts: Bitcoin is shedding its niche status and increasingly trading in lockstep with traditional macro risk assets during periods of uncertainty.

The volatility has been pronounced. After surging to historic highs near $6.50 per pound in late January, copper retreated to around $5.92 by month's end. Bitcoin's journey has been similarly turbulent, falling roughly 40% from its October 2025 peak of $126,173. The simultaneous downturn points to shared macroeconomic headwinds—from geopolitical tensions to shifting expectations for U.S. monetary policy—that are now dictating flows across both digital and physical asset classes.

Copper's role as an economic bellwether is well-established, tied to its critical use in construction, electric vehicles, and the booming AI data center sector. JPMorgan estimates data center copper demand could skyrocket to 475,000 tons in 2026. Yet, as Vasily Shilov, CBDO at crypto exchange aggregator SwapSpace, notes, these fundamentals are being overshadowed. "Concerns surrounding Iran were the main news factor weighing on the market," Shilov told Cryptonews, adding that "political factors are adding pressure... and the Federal Reserve’s decision to keep rates unchanged, with no sign of imminent easing."

The correlation between Bitcoin and copper, once negligible, has strengthened notably since the pandemic. Research has documented spikes in their price relationship, with Bitcoin's correlation to copper hitting 0.84 in late 2022. Some analysts have even tracked the copper-gold ratio as a leading indicator for crypto markets. However, this link remains fragile. Late 2025's "metal season" saw copper rally over 40% while Bitcoin fell, proving the connection can break down entirely.

The recent selloff revealed deeper ties in leveraged markets. On January 30, approximately $120 million in tokenized copper, gold, and silver positions were liquidated on crypto platforms, while over $2.5 billion in non-metal crypto long positions were wiped out. Institutional appetite also appears strained: U.S. spot Bitcoin ETFs have seen nearly $2.8 billion in net redemptions over two weeks, and Galaxy research indicates the average ETF investor is now underwater, with a collective cost basis around $87,830.

Despite the parallel moves, experts caution against using copper as a direct crypto forecasting tool. Copper responds to unique supply shocks—like mining disruptions in Indonesia or Chilean production cuts—that don't directly impact digital asset demand. A 2024 study concluded that the Bitcoin-commodity relationship is "regime-dependent," shifting with market conditions. Today, Bitcoin seems to embody what a Goldman Sachs analyst once termed "digital copper"—a pro-risk, growth-sensitive asset vulnerable to the same fears that rattle industrial markets.

Market Voices:

"This correlation is a wake-up call," says Michael Chen, a portfolio manager at Horizon Capital. "It validates Bitcoin's integration into the broader financial system but also means it's lost its unique diversification appeal during this phase. Investors are treating it as a high-beta tech commodity."

"It's utter nonsense to link a speculative digital token to a physical metal that powers our world," argues Sarah Fitzpatrick, an independent commodities trader. "This is just narrative-spinning by crypto bros to legitimize a crash. Copper's dip is about real Chinese demand; Bitcoin's is about vaporware and exhausted leverage."

"The interconnection is real in the derivatives and tokenized asset space," notes Dr. Aris Thorne, a fintech researcher at Stanford. "The liquidations we saw show how risk is now transmitted across these markets. It's less about direct causation and more about shared investor psychology and margin calls."

"Look, both markets are front-running the same Fed decisions and geopolitical headlines," comments retail investor Diego Ruiz. "My crypto and mining stocks are in the same portfolio now, and they're both red. It's frustrating, but it simplifies my hedging strategy."

As the dust settles, the central question for both assets is whether current prices reflect a lasting demand shock or a temporary positioning purge. Copper retains long-term structural support from global electrification. Bitcoin's recovery hinges on a return of risk appetite. For now, Dr. Copper's latest diagnosis suggests a cautious prognosis for speculative assets worldwide.

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