The great divorce between Bitcoin and Wall Street: how the 2025 bull betrayed cryptocurrencies

While Wall Street’s bull gallops calmly with the S&P 500 hitting new all-time highs (+16% in 2025), Bitcoin stubbornly does its own thing. In 2025, for the first time since 2014, the two worlds are heading in completely opposite directions. The main stock index soars beyond previous highs, the Nasdaq Composite burns 21%, yet the king of cryptocurrencies remains trapped in the $85,000-$90,000 range, ending the period down 3%. It’s the most spectacular betrayal of the year: what was once the “faithful companion” of risky growth has become a crippled investment.

When Bitcoin was the perfect partner (and no longer)

Let’s go back a few months. Bitcoin was the “barometer of risky assets” — when risk increased, so did its price. It was the “high beta” of the stock market party. Then something broke.

In the second half of 2025, Bitcoin’s price plummeted nearly 18%. During the same period, while the Nasdaq soared +21% and the S&P 500 paused at +14.35%, the blockchain masterpiece seemed to have been forgotten. Bloomberg dug into the numbers: the longest streak of trading days with a new daily high? Just 3 days. The lowest recorded in a “new highs” category. The upward push could no longer be sustained.

November was particularly brutal: -17.67% in a single month. The year’s gains were wiped out. While Wall Street kept hitting records, Bitcoin did everything to go back.

Who wins in the stock markets: the numbers that speak

While Bitcoin flounders, the traditional stock market writes its success story. The secret? Companies are earning much more than the market expected.

The impressive figure: 69% of S&P 500 companies that reported earnings beat analyst forecasts. The highest rate in four years. It’s no small surprise — it’s the solid foundation supporting new highs.

Artificial intelligence has become the collective obsession. Nvidia reached a $4 trillion market cap on July 9, a historic milestone. Investors have an unprecedented risk appetite, and that positive sentiment has swept all other asset classes — except Bitcoin, of course.

But there’s something strange: Wall Street is showing incredible resilience even in the face of real risks. Inflation, Trump’s trade threats, geopolitical conflicts — the market seems “desensitized.” Analysts call it the “TACO trade”: “Trump Always Chickens Out” (Trump eventually backs down). The market bets that trade tensions will ease, and stocks remain anchored to historic highs.

Why Bitcoin lagged behind: it’s not just bad luck

If the stock market is the winner, Bitcoin is the loser on several fronts.

Regulatory uncertainty is the first enemy. Yes, the Trump administration showed sympathy toward cryptocurrencies. But the “Clarity Act” — the bill meant to clarify the rules — is stuck in the Senate. It needs revisions, has no voting schedule. Meanwhile, the European Union tightens its grip on exchanges and stablecoins. Regulatory uncertainty freezes capital.

Bitcoin ETFs may have done more harm than good. It sounds counterintuitive, but when institutional investors can buy Bitcoin through traditional channels (like ETFs), they lose enthusiasm for pure tokens and crypto-focused listed companies. The appeal has dissolved.

Market structure betrayed Bitcoin. A major liquidation event in early October wiped out about $19 billion in leveraged positions. It exposed how fragile the crypto market is when leverage is high. Meanwhile, the Federal Reserve continues to adjust its monetary policy moves, and global liquidity moves unpredictably.

The Bitcoin community is divided. Heated debates over network upgrades have created uncertainty. whales and long-term holders have started taking profits. Retail investors? They’re depressed and scared by the four-year halving cycle that could trigger another deep correction.

How Bitcoin became a “macro” asset — and why that’s a problem

Here’s the most important transition that no one emphasizes enough: Bitcoin is no longer the “risk token” of the past. It has become a macro asset in institutional portfolios.

This means Bitcoin now reacts like a macro asset: it’s affected by global liquidity, central bank policies, and the dollar’s performance. It’s no longer the independent player driven by crypto supply shocks (halving, network upgrades). It’s a player in the bigger game.

Historical data confirms this mutation. Since 2020, the correlation between Bitcoin’s returns and the S&P 500 has increased significantly. During periods of rising correlation, the strength of US earnings and risk appetite tend to move together — at least on paper. In 2025, this logic broke down.

Derek Lin, Head of Research at Caladan, explains it this way: Bitcoin’s bull markets of 2017 and 2021 weren’t driven solely by halving. Global liquidity was the real engine. Today, with the US government shutdown resolved, liquidity could flow again — but into which assets? Certainly not into Bitcoin, at least for now.

Collateral victims: when the 2025 bull looks elsewhere

Publicly traded crypto-related companies are suffering the worst of this decoupling.

Take SharpLink Gaming: it bet everything on cryptocurrencies, accumulating over $3 billion in ETH and almost entirely using it for staking and yield generation. Sounds good on paper. In 2025, reality is different: stocks face multiple pressures. Regulatory risk could classify ETH as a security (and everything would change). The company’s valuation is too high. Technical indicators show clear bearish signals.

Bitcoin mining companies aren’t doing much better. TeraWulf saw its stock price rise 120% during the year, but its debt increased dangerously. With Bitcoin’s price falling, the debt problem becomes unmanageable for the company. Analysts warn that debt could become a heavy burden.

What professionals say (when they disagree)

Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence, is cautious: “The stock market and gold are near all-time highs, while Bitcoin, as the quintessential risk asset, is melting away.” It’s the cold re-evaluation of cryptocurrencies by some major institutional players.

Market sentiment has worsened noticeably. Capital inflows into Bitcoin ETFs are slowing. Key figures and institutions have eased support. Matthew Hougan, Chief Investment Officer at Bitwise Asset Management, summarizes: “Retail sentiment is terrible. The market may still have room to fall.”

Not everyone agrees. Stéphane Ouellette, CEO of FRNT Financial, argues that Bitcoin isn’t doing badly — it’s just that its previous rallies were exaggerated. Over a two-year horizon, Bitcoin has still vastly outperformed the S&P 500. The stock market is simply “recovering” what Bitcoin had already gained.

Standard Chartered, however, has changed its mind. It lowered its year-end price target for Bitcoin from $200,000 to $100,000. It postponed its long-term target from 2028 to 2030. A significant shift in narrative.

What could bring Bitcoin back into the game

If we want to understand the future, let’s look at three key variables.

First: regulatory policies. Progress in the US Senate’s review of the “Clarity Act” will largely determine market confidence. The regulatory stance of the European Union and Asian authorities will matter just as much.

Second: global liquidity. As mentioned, Bitcoin’s bull markets of 2017 and 2021 were fueled by global liquidity, not just halving. With the federal shutdown resolved, new liquidity could flow into markets again. The question is: will it flow into Bitcoin or safer assets?

Third: stock market resilience. If the US stock market can maintain current corporate earnings and investor confidence, it could eventually lead the crypto market higher again. Historical data since 2020 shows that when the correlation between Bitcoin and the S&P 500 increases, they tend to strengthen together. The open question: will this correlation continue?

Jack Kenneth, analyst at crypto data firm Nansen, puts it this way: “Today, Bitcoin is increasingly traded as a macro asset in institutional portfolios, reacting to liquidity, policies, and dollar movements rather than supply shocks.”

Bitcoin today: $91.84K, down 2.82% over 1 year. While Wall Street analysts debate the “TACO trade” and stock market resilience, Bitcoin investors watch charts, desperately seeking a turning point between support at $85,000 and the previous all-time high of $125,000. The next move could come from outside factors, Washington decisions, Federal Reserve moves, or global liquidity. For the first time in this 2025 bull, Bitcoin is not the master of its own fate.