For the first time since 2014, Bitcoin and the S&P 500 are moving in opposite directions. While the US index is up 16% this year, BTC is down 3%. This historic divergence challenges Bitcoin's status as a risky asset and raises questions about its maturity as an independent asset class.
The correlation between Bitcoin and equity markets has long served as a compass for institutional investors. Since 2020, BTC has essentially behaved as a high-beta tech asset, amplifying the movements of the Nasdaq and S&P 500. This dynamic has brutally reversed in 2025.
Bloomberg data reveals a performance gap of nearly 19 percentage points between the S&P 500 and Bitcoin this year. This divergence even exceeds that observed during periods of extreme stress like March 2020 or the FTX collapse in 2022. Back then, both asset classes fell simultaneously before rebounding in tandem.
What makes this decoupling particularly significant is the macroeconomic context. Artificial intelligence-related tech stocks are soaring, driven by record capex spending and solid growth prospects. Meanwhile, Bitcoin struggles to maintain support at $90,000 after reaching a peak of $126,000 last October. Momentum has clearly shifted to other segments of the risk-on market.
Flows into spot Bitcoin ETFs, which had propelled the 2024 rally, have considerably slowed. Forced liquidations have amplified selling pressure, with several billion dollars in leveraged positions wiped out in recent weeks. Retail participation, the traditional driving force of crypto bull runs, has evaporated.
Beyond simple price action, several structural factors explain this underperformance. Hopes for a pro-crypto regulatory framework in the United States have not yet produced the expected effects on capital inflows. Institutional announcements, once major catalysts, now generate lukewarm market reactions.
Technical indicators confirm this weakness. BTC has lost its main moving averages, with an RSI stagnating in neutral territory without managing to break above 60. Trading volumes remain anemic compared to last year’s peaks, a sign of a lack of conviction on both sides of the order book.
This divergence raises a central question: Is Bitcoin maturing as a decorrelated asset, or is it simply going through a normal consolidation phase after explosive gains? Over a three-year period, BTC still vastly outperforms equity indices. The current correction could be merely a healthy retracement after an appreciation of more than 500% since the 2022 lows.
Traditional defensive assets like gold are currently attracting flows, suggesting sectoral rotation rather than a generalized flight from risk. If Bitcoin manages to stabilize a solid floor around $85,000-$90,000 and retail participation returns with the end of tax season, the bull cycle could resume its course.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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