Bitcoin’s tandem with stocks appears to be ending

For the first time in a decade, Bitcoin will likely not end up trading in tandem with the S&P 500, the largest and broadest basket of US stocks. The S&P has already gained around 16% this year, while Bitcoin is currently facing a small loss compared to the beginning of the year. So, all that institutional money that has poured into crypto since 2024 also has a downside.

History

Over the past decade, Bitcoin has consistently traded in tandem with the world’s largest and most well-known basket of stocks, the S&P 500. Bitcoin, of course, consistently outperformed stocks.

For example, in 2017, the group of stocks saw a relatively modest 7% increase, while the largest digital currency gained over 1,300%. In 2020, the difference narrowed somewhat, with growth of 8% versus 270%, respectively. However, it also works the other way around. In 2022, the S&P fell by around 13%, while Bitcoin’s price fell by 62%.

But this year is different, and analysts believe the influx of Bitcoin ETFs is particularly important. The launch of Bitcoin ETFs, primarily by BlackRock, attracted new, often older investors and has drastically changed the crypto market since 2024. Now that the market is going into a negative period, there’s clearly less appetite for Bitcoin among boomers, whereas gold and silver are trading close to new all-time highs. They clearly don’t have “diamond hands” just yet.