The S&P 500 has added roughly $2.1 trillion in market cap this month, close to crypto's entire market value, while bitcoin is up just 2% and stuck near $64,600. Analysts point to an AI-concentrated equity rally bitcoin has little exposure to, plus its own headwinds — a hack, stablecoin outflows, and traders positioning for an expected October cycle bottom.
The S&P 500 has gained 3.12% this month, adding roughly $2.1 trillion in market cap and pushing its total value to a record $70.5 trillion. Bitcoin, meanwhile, is up just 2% over the same stretch, trading around $64,600 — a level it had already touched back in July.
An AI rally bitcoin can't ride
Since the COVID crash of early 2020, bitcoin has tended to track stocks more often than not. This time the rally is concentrated in AI and semiconductor stocks, an area where bitcoin has little direct exposure, said Adam Haeems, head of asset management at Tesseract Group, which manages more than $500 million in client assets.
Lower oil prices from a potential reopening of the Strait of Hormuz could benefit both markets, but through different channels, Haeems said. Equities feel the benefit immediately through lower costs, while for bitcoin it runs through inflation expectations and Federal Reserve policy — a slower process with an uncertain outlook for September.
Crypto's own headwinds
Bitcoin is also fighting separate battles this month. They include the $120 million Coldcard exploit, uncertainty around the Clarity Act, and reports of Strategy liquidating its BTC. Haeems said the Coldcard exploit has damaged sentiment and that Strategy has sold bitcoin in three consecutive months, but neither event has triggered a broader credit event or forced liquidation cycle.
Rising bond yields are adding further pressure, pulling capital out of crypto through stablecoins. USDT's supply has fallen from about $190 billion in April to $183 billion, while USDC has dropped from $79.5 billion to $72 billion, as real Treasury returns sit at their highest since 2008.
Traders wait for an October bottom
Markus Thielen, founder of 10x Research, says the lack of bullish momentum likely reflects a self-fulfilling belief in the four-year halving cycle. Traders have collectively bought into a thesis pointing to a bottom in early October — a reversal from last October, when most of these same traders dismissed the cycle outright — and are sitting on the sidelines rather than pushing bitcoin higher even as US stocks rally. Thielen argues that bitcoin's resistance to further declines despite a hawkish Fed is itself a bullish signal traders are underestimating.
ETF flows send mixed signals
US-listed bitcoin ETFs saw an outflow of $61.53 million, snapping a three-week streak of inflows, according to SoSoValue. This week they pulled in $626 million — the highest tally since early May, though the trend needs to hold.
Giottus.com CEO Vikram Subburaj said several consecutive days of inflows are needed to confirm a sustained recovery. He's watching support near $63,000-$63,400 and resistance between $64,500 and $66,000.
Wintermute said the ETF bid getting absorbed without moving price suggests the marginal buyer in spot isn't outright long: "For breadth to expand, we likely need to see BTC vol off this floor first."
Source: CoinDesk
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