Bitcoin and the stock market: when one rises, the other falls

The portrait of investor disappointment in 2025 looks like this: those who believed in bitcoin as a “seismograph of risky assets” are standing with a portfolio that has fallen by 3%, while the S&P 500 has surged by 16% and set a new all-time high. This is the first such case since 2014 — when the dynamics of the two most popular risky assets turned out to be diametrically opposite.

Collapse of correlation: from synchronization to independence

Previously, bitcoin and US stock indices moved in a dance of synchronization. But in the second half of 2025, the scenario changed fundamentally. During the October crash, bitcoin lost about 18% of its value, while the Nasdaq Composite gained +21%, and the S&P 500 earned +14.35%.

At the bottom of the divergence — a simple fact: in November, bitcoin experienced its worst month of the year with a decline of 17.67%, and its longest streak of record highs was shortened to just 3 trading days. This is the weakest indicator during the entire growth period of the asset. For comparison: American stock indices continued to rise like yeast, demonstrating resilience that irritates crypto investors.

Why Wall Street celebrates while crypto mourns?

The success of the traditional market has a clear explanation. Corporate profits in the US exploded above expectations — 69% of S&P 500 companies that reported exceeded analyst forecasts. This is the best result in four years. And when we talk about Nvidia, which on July 9 became the first company in the world with a market capitalization of over $4 trillion, we understand why AI stocks are hotter than anything else.

Moreover, Wall Street investors experienced a kind of desensitization to risks. Inflation? No problem. Trade threats from the administration? Small potatoes. Geopolitical conflicts? The market is heating up but remains near historic highs. Some experts call this “TACO trading” — the market believes that “Trump Always Chickens Out,” meaning the president will ultimately back down, and threats will disappear.

What keeps bitcoin in the $85K-$90K corridor?

Behind regulatory uncertainty lies a lot of pain. The US passed the “Clarity Act” through the House of Representatives, but it is stuck in the Senate without a clear voting schedule. When you are an investor, it’s like waiting for food in a restaurant where the bartender says: “It will be ready soon, but I don’t know when.”

Against this backdrop, the EU and Asian regulators are tightening control over crypto exchanges and stablecoins. The launch of a bitcoin ETF unexpectedly weakened the asset’s dynamics — when investors gained easy access to bitcoin through traditional channels, companies that thrived on crypto themes lost their shine.

Additionally, the October liquidity crash wiped out about $19 billion from leveraged positions. The market proved vulnerable, and the Federal Reserve’s monetary policy adjustments cut off access to cheap money. Heated debates within the bitcoin community about network upgrades only increased uncertainty.

Institutional players: optimism is dying

Senior Bloomberg Intelligence strategist Mike McGlone expressed himself without diplomatic politeness: “The stock market and gold are close to historic highs, and bitcoin as the peak of risky assets is melting.” Inflows into bitcoin ETFs have slowed, and support from leading institutions has weakened.

Matthew Haughan from Bitwise Asset Management is even more pessimistic: “Retail investor sentiment is very poor, and the market could fall even lower.” Meanwhile, Standard Chartered has lowered its bitcoin price forecast for the end of the year from $200K to $100K — a harsh overestimation.

But not everyone thinks the same way. FRNT Financial CEO Stefan Ouellette proposed an alternative: bitcoin simply did its job, growing much faster, and now the stock market is just “catching up” with this growth. Over two years, bitcoin still significantly outperforms the S&P 500.

What’s next: three key variables

First — regulatory trajectory. The course of the Clarity Act review in the US Senate and the attitude of global economies towards crypto will directly determine whether trust in the market will return.

Second — global liquidity. Darek Lin from Caladan notes: “Bullish bitcoin markets in 2017 and 2021 were built not only on halvings but on global liquidity.” If the US resolves the budget shutdown issue, liquidity may return and support bitcoin.

Third — structural evolution. Jack Kennett from Nansen summarizes: “Bitcoin is increasingly traded as a macro asset in institutional portfolios, and its reaction to liquidity, policy, and dollar dynamics exceeds mechanical responses to supply shocks.” This means bitcoin is now a puppet of global macro trends, not an autonomous digital currency.

The current price of bitcoin is $90.76K, with an annual decline of 3.98%. The all-time high remains at $126.08K. Investors are looking at the corridor between current support and the previous peak, where the next market battle will take place.