Market News

(Bloomberg) -- The S&P 500 has climbed more than 16% in 2025, while Bitcoin is down 3% — the first time since 2014 that stocks have rallied while the token is down, according to data compiled by Bloomberg.

The digital asset has rarely deviated so cleanly from other risk assets even during past crypto winters. The dislocation defies expectations that cryptocurrencies would thrive under President Donald Trump’s return to the White House amid favorable regulation and a wave of institutional adoption.

Earlier this year, Bitcoin notched a record high above $126,000. But a two-month rout, triggered by billions of dollars in forced liquidations and a collapse in retail momentum, has sparked an industry-wide downturn. Bitcoin appears to be ending the week on a down note, dropping as much as 4.4% to $88,135 on Friday. That’s about 30% below the October record.

Bitcoin and stocks have historically moved in tandem — a relationship that was especially prominent during the pandemic, when a low-interest-rate environment fueled rallies in stocks, cryptocurrencies and various speculative investments.

Once seen as a high-beta companion to growth-driven risk-on trades, Bitcoin is no longer riding that wave. The asset’s decoupling is especially striking given the broader backdrop: artificial-intelligence stocks have soared, capital spending has surged, and investors have poured back into equities. Meanwhile, gold and silver are within striking distance of record highs.

“Bitcoin is a momentum-based asset,” said Matt Maley, chief market strategist at Miller Tabak + Co. “In most of the past ten years, when momentum has been strongly bullish, Bitcoin has been leading the way. The precious metals have stolen a lot of the usual momentum money inflows from Bitcoin this year.”

Sentiment has deteriorated quickly. Inflows into Bitcoin ETFs have slowed, prominent endorsements have quieted, and key indicators — like the token’s longest streak of daily highs — are flashing weakness. That run lasted just three sessions, the lowest for any year in which Bitcoin set new highs, suggesting gains aren’t sticking for too long.

For Stephane Ouellette, chief executive officer and co-founder of FRNT Financial Inc. in Toronto, Bitcoin’s current underperformance is just the result of the asset outpacing others earlier on. On a two-year basis, Bitcoin is massively outperforming the S&P 500, which can — at least in part — be attributed to the Trump administration’s embrace of the industry, he said. Stocks, in his view, were playing catch-up.

“The timing of the calendar year also potentially warps this metric. As of early October, Bitcoin had drastically outperformed the S&P 500 on a trailing 12-month basis,” Ouellette said. “We could conceivably be in a relatively normal course pullback for the bull-market which happens to warp the narrative on relative performance.”

(Updates the price of Bitcoin in the third paragraph.)