With the S&P 500 in Correction, What’s Next for Bitcoin?

S&P 500 Correction Deepens – What It Could Mean for Bitcoin

The S&P 500 has officially entered correction territory, dropping 10% from its peak. If losses extend to 20%, it would confirm a bear market. But how does this impact Bitcoin? A historical look at past corrections suggests that Bitcoin has often reacted with even greater volatility when traditional markets stumble.

A Look at Previous Market Corrections and Bitcoin’s Response

Since Bitcoin’s launch in 2009, the S&P 500 has endured multiple downturns, often triggering sharp movements in crypto markets:

• 2008 Global Financial Crisis: While Bitcoin was still in its infancy, the S&P 500 plunged nearly 60% in one of its worst crashes.
• 2019 Pullback: The S&P 500 corrected 20%, and Bitcoin—already in a bear market—collapsed 85% from its all-time high.
• March 2020 COVID-19 Crash: The S&P 500 tumbled 40%, while Bitcoin plunged 60% in a matter of days before recovering.
• 2022 Market Selloff: A 25% correction in the S&P 500 coincided with Bitcoin falling another 25%, bottoming at $15,000 about a month later.

How Bitcoin’s Current 30% Drop Compares

While S&P 500 corrections of 10% or more are common, Bitcoin has typically experienced sharper declines during these periods. The ongoing correction has already seen Bitcoin drop 30% from its all-time high, mirroring past trends.

Notably, Bitcoin’s last major 30% drop occurred in August 2024, triggered by the yen carry trade unwind. Given its history of sharp price swings, Bitcoin’s recent pullback appears to be a natural part of market cycles rather than a long-term bearish signal.

As investors watch for signs of stabilization, history suggests that both traditional and crypto markets could be setting up for their next phase of volatility or recovery.