Crypto Market Cap Jumps $2 Trillion This Month, Yet Bitcoin Struggles to Catch the Momentum

The S&P 500 has gained approximately $2.1 trillion in market value this month, nearly matching the size of the entire crypto market, yet bitcoin has barely moved higher. The disconnect reflects deeper market forces beyond the usual relationship between risk assets.

U.S. equities have staged a strong comeback, while bitcoin has continued to struggle for momentum. The cryptocurrency’s inability to follow stocks higher is being driven by several factors rather than a single issue.

The S&P 500 has risen 3.12% this month, adding about $2.1 trillion to its market capitalization and reaching a record total valuation of $70.5 trillion. The index is trading around 7,723 points, while the Nasdaq 100 and Dow Jones Industrial Average have also advanced, showing strong investor confidence across major stock indexes.

Bitcoin, however, has remained largely unchanged. Despite becoming increasingly correlated with equities after the 2020 pandemic crash, BTC has gained only around 2% this month and continues to trade near $64,600, stuck in the same range it has occupied for weeks.

Analysts say bitcoin’s lag is partly explained by the composition of the current stock market rally. The move higher has been powered mainly by artificial intelligence and semiconductor companies rather than a broad increase in risk appetite that would typically benefit assets like bitcoin.

Adam Haeems, head of asset management at Tesseract Group, said the equity rally is concentrated in sectors such as AI and chipmakers, where bitcoin has little direct exposure.

Some broader economic developments are still favorable for risk assets. Lower oil prices and hopes for a return to normal shipping conditions through the Strait of Hormuz after disruptions caused by the Iran conflict could support markets. However, equities are benefiting from these factors more quickly than cryptocurrencies.

Haeems explained that cheaper energy costs can immediately improve corporate earnings, while bitcoin’s response depends on how those changes affect inflation expectations and Federal Reserve policy. With uncertainty still surrounding the Fed’s September outlook, the impact on BTC has been delayed.

Paul Howard, senior director at market maker Wincent, said the stock market’s focus on AI and mega-cap companies has not translated into meaningful crypto demand.

He noted that bitcoin’s previous rally was supported by strong ETF inflows over the past two years, but that momentum has slowed as the market looks for new drivers. According to Howard, future catalysts could come from clearer regulations and continued expansion of stablecoin adoption.

Crypto market issues weigh on bitcoin performance

Bitcoin is also facing several sector-specific challenges that have weakened sentiment. These include the $120 million Coldcard security incident, uncertainty over the Clarity Act, and reports that Strategy has sold some of its bitcoin holdings.

Haeems said these events have affected investor confidence but have not caused a broader market disruption or triggered a major liquidation wave.

He also pointed to higher bond yields as another factor limiting crypto demand. Rising real yields are encouraging investors to keep money in traditional fixed-income assets rather than moving funds into digital assets.

Stablecoin supply has also declined, signaling reduced liquidity in the crypto ecosystem. Haeems said USDT supply has dropped from around $190 billion in April to $183 billion, while USDC has fallen from roughly $79.5 billion to $72 billion.

With Treasury yields offering their strongest real returns since 2008, investors are being paid to hold capital outside of crypto markets.

Halving expectations keep traders cautious

Bitcoin’s four-year halving cycle is another factor influencing market behavior.

Markus Thielen, founder of 10x Research, said many traders are staying cautious because they expect historical cycle patterns to point toward a possible bottom around October. This expectation has reduced buying pressure even as stocks continue climbing.

Thielen said traders have increasingly accepted the four-year cycle theory, leading many to wait for a potential bottom rather than aggressively entering the market.

He added that investors may be overlooking a bullish signal: bitcoin has remained resilient despite a restrictive Federal Reserve environment.

According to Thielen, a softer Fed stance and the possibility that bitcoin has already completed its cycle low could create upside opportunities that the market is currently underestimating.

Other analysts believe inconsistent ETF demand is also limiting bitcoin’s advance. U.S. spot bitcoin ETFs recorded $61.53 million in outflows, ending a modest three-week inflow streak, according to SoSoValue data. Although the funds attracted $626 million this week, analysts say continued inflows will be needed to confirm renewed institutional interest.

Vikram Subburaj, CEO of FIU-registered crypto platform Giottus.com, said sustained ETF inflows over several days would be necessary before confirming a stronger institutional recovery. He identified support for bitcoin around $63,000-$63,400, with resistance between $64,500 and $66,000.

Market maker Wintermute added that ETF activity may not necessarily indicate strong bullish demand, as some flows could be tied to arbitrage strategies rather than direct bitcoin accumulation.

The firm said ETF buying has been absorbed without pushing prices significantly higher, suggesting limited spot demand. Instead, traders have rotated into individual crypto assets, with ZEC gaining 10.9% over the week and HYPE rising 5% despite weak overall market performance.

Wintermute said broader crypto momentum is likely to return only when bitcoin volatility declines and BTC establishes a clearer direction.