Bitcoin Breaks Out of Equity Rally for the First Time in Ten Years

The S&P 500 has surged more than 16% so far in 2025, while Bitcoin has slipped 3% marking the first year since 2014 that U.S. equities have rallied as the world’s largest cryptocurrency has moved in the opposite direction, according to data.

‍

Such a clean break in performance is unusual for Bitcoin, even during past crypto downturns. The divergence also runs counter to expectations that digital assets would flourish under President Donald Trump’s return to the White House, particularly as regulatory policy becomes more favorable and institutions deepen their involvement in the space.

‍

Earlier in the year, Bitcoin powered to an all-time high above $125,000. But the rally quickly reversed as a wave of forced liquidations wiped out billions of dollars in leveraged positions, triggering a two-month selloff. Retail enthusiasm collapsed at the same time, accelerating the slide. Bitcoin briefly tumbled to roughly $85,000 this week nearly 30% below its peak before managing to climb back above $90,000 on Tuesday.

‍

Historically, Bitcoin and equities have often moved in sync, a trend that became especially pronounced during the pandemic. Ultra-low interest rates fueled simultaneous gains in stocks, cryptocurrencies, and a variety of high-risk speculative assets. Once viewed as a high-beta proxy for fast-moving, growth-oriented trades, Bitcoin is no longer benefiting from that same momentum.

‍

The timing of the breakdown is even more notable given the broader market backdrop. AI-driven equities have been on a tear, corporate capital expenditures are rising, and investors have returned decisively to stocks. At the same time, gold and silver are hovering near record highs, drawing fresh interest from investors seeking assets with strong upward momentum.

‍

“Bitcoin is a momentum-driven asset,” said Matt Maley, chief market strategist at Miller Tabak + Co. “For most of the past decade, whenever momentum has turned sharply bullish, Bitcoin has typically been the leader. But this year, precious metals have absorbed a lot of the inflows that would normally chase Bitcoin.”

‍

Sentiment around the token has deteriorated swiftly. Inflows into Bitcoin exchange-traded funds have slowed significantly, high-profile endorsements have quieted, and key technical measures are pointing to a more fragile market environment. One indicator in particular Bitcoin’s streak of consecutive daily highs is signaling weakness. The streak lasted only three sessions, the smallest run in any year when Bitcoin has set new records, suggesting that investors are quick to lock in profits rather than let gains compound.

‍

Still, not everyone sees the current underperformance as a sign of deeper structural fragility. According to Stephane Ouellette, CEO and co-founder of FRNT Financial Inc. in Toronto, Bitcoin’s recent slump should be viewed in context. On a two-year horizon, Bitcoin has dramatically outperformed the S&P 500, a trend he attributes in part to the Trump administration’s supportive stance toward the digital-asset industry. In his view, the recent shift is more about equities catching up than Bitcoin falling behind.

‍

“The timing of the calendar year can distort how these comparisons look,” Ouellette explained. “Back in early October, Bitcoin had significantly outpaced the S&P 500 on a trailing 12-month basis. What we may be seeing now is simply a typical pullback within a broader bull market one that temporarily skews the narrative around relative performance.”

‍