Global markets struggled in 2025 after shifts in US trade policy weighed on risky assets.
Both the S&P 500 and the Nasdaq posted declines earlier this year. Bitcoins though [BTC] under sharper pressure, especially during the fourth quarter.
Yet Bitcoin increasingly deviated from equities.
The correlation reached an annual low
Historically, Bitcoin and US stocks have shown a strong correlation during major market cycles. That relationship has weakened considerably in recent months.
According to analyst DarkfostBTC’s correlation with the S&P 500 and the Nasdaq fell to a yearly low. The difference came after markets cooled due to concerns about tariffs and trade wars.
While US stocks maintained upward momentum, Bitcoin struggled to regain its previous uptrend.
Source: S&P Global
The S&P 500 rose about 2.06% this quarter and about 16% this year, from nearly 5,400 to about 6,900. At the same time, the Nasdaq Composite gained about 4.76% in the fourth quarter and about 20.12% in 2025.
Bitcoin, on the other hand, remained under pressure after falling around 36%. The recovery effort stalled, widening the performance gap.
Source: Checkonchain
Bitcoin’s correlation with SPX fell to around -0.299, while its correlation with the Nasdaq fell almost -0.24.
Correlations with gold and the US Dollar Index also weakened, while US government bonds were relatively strong.
Long-term statistics told a different story
The short-term underperformance contrasted with Bitcoin’s longer-term return profile.
Using the compound annual growth rate, Bitcoin continued to outperform traditional assets over the longer term. CAGR filtered out short-term volatility and focused on sustainable growth.
Source: Checkonchain
Bitcoin’s five-year CAGR was above 200%, which translates to about 47% per year. Over the same period, the S&P 500 returned an average of almost 17%, while the Nasdaq returned almost 20%.
That data suggested that Bitcoin’s long-term correlation with stocks remained asymmetric, driven more by return potential than short-term co-movement.
What the difference meant
The correlation breakdown had mixed implications for Bitcoin.
On the one hand, the weakening alignment strengthened BTC’s status as a separate asset class. Stock market declines may not automatically translate into crypto.
On the other hand, the decoupling limited Bitcoin’s ability to benefit from stock rallies. Capital was migrated to artificial intelligence and data center stocks, leaving crypto out of the picture.
This divergence left Bitcoin trading independently, with macro sentiment exerting an uneven influence.
Final thoughts
- Bitcoin’s decoupling from equities has reshaped its role within the broader markets, rather than weakening its long-term position.
- That independence could increase short-term volatility, but could also redefine how BTC responds to future macro shifts.