Watch out: Bitcoin isn’t what you think it is

Core Insights - Bitcoin's performance has closely mirrored that of the ProShares UltraPro QQQ ETF, indicating a lack of diversification benefits traditionally associated with cryptocurrencies [4][5][7] - The introduction of ETFs allowing investment in bitcoin has significantly tied its price movements to the broader U.S. market, diminishing its role as an uncorrelated asset [6][7] - Recent research suggests that bitcoin is increasingly behaving like a small-cap stock, raising questions about its value proposition compared to traditional equities [8] Investment Comparison - A $10,000 investment in bitcoin has shown similar returns to that of the UltraPro QQQ ETF over nearly three years, with only minor monthly variations [2][4] - The UltraPro QQQ ETF aims to deliver three times the daily performance of the Nasdaq-100 index, indicating high volatility and risk [3] Market Dynamics - The launch of bitcoin ETFs in January 2024 has fundamentally altered the cryptocurrency market, aligning its investor base more closely with that of tech stocks [6][7] - The correlation between bitcoin and technology stocks has increased since the AI mania sparked by the launch of ChatGPT [6][7]