- Published on
S&P 500 has added crypto's $2 trillion market cap this month. Bitcoin is not impressed. Here's why
- Authors
- Name
- DeepHorus
The S&P 500 has added roughly $2.1 trillion in market capitalization this month, a gain almost equal to the entire crypto market's value, while bitcoin has barely moved. The stock index rose 3.12% to a record $70.5 trillion, but bitcoin trades around $64,600, up just 2% over the same stretch. This divergence marks a significant shift from the post-2020 pattern where bitcoin often tracked equities.
Since the COVID crash of early 2020, bitcoin has generally moved in tandem with stocks, but this month's equity rally is driven by AI and semiconductor stocks, sectors with little direct link to cryptocurrency. According to analysts, the stock surge is not a broad macro risk-on impulse that would typically lift assets like bitcoin. Instead, it is a stock-specific narrative that leaves digital assets behind.
Several crypto-specific headwinds are also capping upside. The $120 million Coldcard exploit has damaged sentiment, and Strategy has reportedly sold bitcoin for three consecutive months. Additionally, stablecoin supplies are shrinking, with USDT falling from $190 billion in April to $183 billion and USDC dropping from $79.5 billion to $72 billion, according to Tesseract Group's Adam Haeems.
These factors suggest that bitcoin's role as a risk asset is evolving, with its correlation to stocks weakening. The divergence also implies that crypto markets need their own catalysts rather than relying on equity momentum. Rising bond yields, which offer real Treasury returns at their highest since 2008, are drawing capital away from stablecoins and digital assets.
Adam Haeems explained that lower oil prices from a reopening of the Strait of Hormuz benefit equities immediately through lower business costs, but bitcoin's effect runs through inflation expectations and Federal Reserve policy, which takes longer. Paul Howard of market maker Wincent echoed this, noting the stock rally is biased towards AI and mega-caps, which does not necessarily translate into crypto flows. Howard added that the crypto market now seeks its own catalyst independent of U.S. equities.
Howard expects that catalyst to arrive in Q4, when the market anticipates regulatory clarity and continued stablecoin growth. However, Haeems remains cautious, pointing to an uncertain September outlook for Fed policy. Traders are also sitting out ahead of an expected October cycle bottom, leaving bitcoin range-bound while stocks continue their record run.
