• Bitcoin and the S&P 500 have exhibited similar price patterns in the past few months.
  • The rising correlation could be due to institutional players entering the crypto market and Fed's recent rate cut.
  • Bitcoin has outperformed over 250 altcoins in the top 300 since the beginning of the year.

Bitcoin's (BTC) price rallied alongside the S&P 500 (SPX) on Thursday, strengthening its rising correlation with the index in 2024.

Bitcoin has moved largely in tandem with S&P 500 in past few months

Bitcoin and the crypto market have been in an uptrend since Wednesday following the Federal Reserve's (Fed) decision to cut interest rates by 50 basis points. Bitcoin is up nearly 3% in the past 24 hours, rising briefly above the $63,000 level for the first time in three weeks.

Since hitting a low of $53,300 on September 6, Bitcoin has rallied over 17%, adding more than $200 billion in market capitalization.

However, the recent rally isn't peculiar to Bitcoin and cryptocurrencies alone, as US stocks have also been on an uptrend.

Since the Fed announced the rate cut, the S&P 500 has added nearly $1 trillion in market capitalization. Like Bitcoin, the index has also seen an impressive recovery from a low on September 6, gaining over $3 trillion in market cap.

Besides bullish seasons, Bitcoin and the S&P 500 have followed the same pattern in recent bearish periods. The index dropped nearly 10% days after the “yen carry trade” unwinding. In the same period, Bitcoin went below $50,000

The move underscores Bitcoin's rising correlation with the S&P 500 in recent months.

BTC/USDT vs SPX

BTC/USDT vs SPX

A potential reason for the rising correlation could be traced to the increased participation of institutional players in the crypto market through the launch of Bitcoin and Ethereum exchange-traded funds (ETFs). Additionally, the anticipation and eventual Fed rate cut is expected to see investors deploy capital into risk assets like crypto and stocks, causing a potential simultaneous rise in both assets.

While the correlation exists for now, it's important to note that it can change unexpectedly, especially due to the somewhat unclear regulatory hurdle Bitcoin faces and high speculative behavior of most crypto investors.

Meanwhile, a recent chart by @MustStopMurad on X shows that only 42 cryptocurrencies in the top 300 outperformed Bitcoin since the beginning of the year. He further highlighted that most of the 42 cryptocurrencies were recently launched tokens, and the others were largely meme coins. As a result, Bitcoin has proven a better bet than the larger percentage of reputable altcoins.

Bitcoin, altcoins, stablecoins FAQs

Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.

Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.

Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.

Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Is Uniswap the best-performing DEX exchange?

Is Uniswap the best-performing DEX exchange?

Uniswap daily active users are the highest than other DEX exchanges. Token Terminal data show UNI has collected $399 million in fees in the past three months. UNI’s 180-day trading volume is the highest in the DEX sector.

More Uniswap News
These crypto tokens have the best chance of recovery: XRP, Solana, Ethereum, Bitcoin, Chainlink

These crypto tokens have the best chance of recovery: XRP, Solana, Ethereum, Bitcoin, Chainlink

Crypto intelligence tracker Santiment tracks the narrative among traders to identify which assets have the best chance of recovery. Typically, the assets that crypto traders have the most negative sentiment towards, have the best chance of recovery. 

More Cryptocurrencies News
BTC vulnerable despite surge in stablecoin market capitalization

BTC vulnerable despite surge in stablecoin market capitalization

Bitcoin price closed below the $62,000 support on Wednesday, showing signs of weakness. CryptoQuant report shows how rising stablecoin market capitalization could be a positive sign for Bitcoin and other cryptocurrencies.

More Bitcoin News
Shiba Inu could dip 7% as SHIB whales reduce their holdings

Shiba Inu could dip 7% as SHIB whales reduce their holdings

Shiba Inu, the second largest meme coin in the crypto ecosystem, edges slightly higher and trades at $0.00001710 at the time of writing on Thursday after a three-day decline. On-chain and technical indicators signal that further correction is likely in the meme coin. 

More Shiba Inu News
Bitcoin: Is BTC sell-off over?

Bitcoin: Is BTC sell-off over?

Bitcoin price declined over 6% this week until Friday as the escalation of the conflict between Iran and Israel added fuel to this sell-off. The decline was also supported by falling institutional demand for ETFs. BTC bulls seem to be holding strong at a critical support level.

Read full analysis
Five best Forex brokers in 2024

Five best Forex brokers in 2024

VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals. 

Read More

BTC

ETH

XRP