TLDR
- The S&P 500 is up 3.12% this month, adding about $2.1 trillion in market cap, while Bitcoin has gained just 2% and stayed near $64,600.
- Analysts say the stock rally is driven by AI and semiconductor stocks, sectors Bitcoin has little direct exposure to.
- A Coldcard hardware wallet exploit has drained an estimated $120 million, adding pressure on sentiment.
- Stablecoin supply is shrinking as rising bond yields pull capital toward Treasuries instead of crypto.
- 10x Research’s Markus Thielen says traders are sitting on the sidelines waiting for an October bottom tied to the four-year halving cycle.
The S&P 500 has climbed 3.12% in August, adding roughly $2.1 trillion in market value and pushing its total worth to a record $70.5 trillion. Bitcoin has managed only a 2% gain over the same period. It’s trading near $64,600, stuck in the same range it has held for weeks.
Why the Stock Rally Isn’t Reaching Bitcoin
Bitcoin has usually tracked stocks since the 2020 Covid crash. This month’s gap is unusual.
Adam Haeems, head of asset management at Tesseract Group, says the equity rally is concentrated in areas Bitcoin doesn’t touch. “Partly because the equity rally is being driven by areas to which bitcoin has little direct exposure, particularly AI and semiconductor stocks,” he said.
Paul Howard of Wincent made a similar point. Gains piling into AI and mega-cap stocks don’t automatically flow into crypto the way a broader risk-on move would.
Even good macro news moves slower for Bitcoin. Lower oil prices and hopes for smoother shipping through the Strait of Hormuz help both markets, but stocks feel it faster. “Equities receive a relatively immediate benefit through lower business costs. For bitcoin, the effect runs through inflation expectations and then Federal Reserve policy,” Haeems explained.
Crypto has its own problems layered on top. Analyst account usethebitcoin reported this week that the Coldcard hardware wallet exploit has now drained an estimated $120 million from vulnerable wallets, a figure that keeps climbing as researchers find more affected addresses.
Strategy has sold Bitcoin for three straight months. Haeems said neither event alone has caused a credit crisis, but together they’ve limited upside.
Rising bond yields are quietly draining capital too. USDT supply has fallen from $190 billion in April to $183 billion now, and USDC has dropped from $79.5 billion to $72 billion. “With real Treasury returns at their highest since 2008, capital is being paid to remain outside crypto,” Haeems said.
The Halving Cycle Theory
Markus Thielen of 10x Research points to a different explanation. Traders have broadly accepted that Bitcoin’s four-year cycle points to a bottom in early October.
“Bitcoiners have suddenly, collectively bought into the four-year cycle thesis… so they’re waiting on the sidelines,” Thielen said, calling it a reversal from last year when traders dismissed the theory.
He argues Bitcoin’s refusal to drop further despite a hawkish Fed is a signal traders are underweighting.
Spot Bitcoin ETFs saw a $61.53 million outflow before rebounding to a $626 million weekly inflow, the strongest since early May. Giottus CEO Vikram Subburaj wants more consecutive inflow days before calling it a trend, watching support near $63,000 to $63,400.
Wintermute suggested the ETF buying may be arbitrage, not conviction. A confirmed daily close above $66,200 to $66,800 remains the level needed to open a path toward $72,000 to $74,000.
