Bitcoin vs S&P 500: Chart, Correlation, and Bull Run Potential
- Bitcoin experienced a sharp decline in late 2025 due to macroeconomic factors, while the S&P 500 showed more stable performance.
- Historical data from 2011-2025 reveals Bitcoin’s high volatility but also significantly higher average annual returns compared to the S&P 500 index.
- Investor sentiment shifted negatively toward Bitcoin amid regulatory uncertainty and macroeconomic headwinds, impacting its short-term price action.
Bitcoin’s wild ride took another turn in late 2025, with a sharp decline that erased earlier gains. The digital asset plummeted from $126,000 to $81,000, sparking fears of a prolonged bear market. This decline highlights the inherent volatility of cryptocurrency when compared to the more traditional and stable S&P 500. This article dives into the bitcoin vs S&P 500 performance, correlation, and potential for a bull run, analyzing historical data, market sentiment, and macroeconomic factors influencing their price action.
Bitcoin vs S&P 500: Historical Performance Comparison (2011-2025)
A historical comparison of Bitcoin and the S&P 500 provides insight into their drastically different risk and return profiles. Over the period from August 2011 to July 2025, Bitcoin demonstrated a compound annual growth rate of 102.41%, while the S&P 500 index achieved a more modest 16.65%. However, Bitcoin’s standard deviation of 150.50% far exceeds the S&P 500’s 13.78%, underscoring its volatility. The Sharpe ratio, which measure risk-adjusted return, was 0.83 for Bitcoin and 1.11 for the S&P 500, reflecting the S&P 500’s superior risk-adjusted performance. This comparison highlights the importance of understanding the time horizon and risk tolerance when considering investments in these asset classes. Bitcoin vs S&P 500 presents a compelling case study in risk and reward.
Analyzing Bitcoin’s 2025 Decline: Macro and Regulatory Impact
Bitcoin’s sharp decline in late 2025 can be attributed to a confluence of macroeconomic and regulatory factors. The Federal Reserve’s signals of delayed rate cut and elevated interest rates intensified capital flight from risk assets like Bitcoin to safer investments. This surge in bond yields created a headwind for cryptocurrency. Regulatory ambiguity surrounding cryptocurrency, particularly from the SEC, further exacerbated selling pressure. Institutional ‘whale’ BTC withdrawals added to the downward momentum. This combination of factors created a perfect storm, leading to significant downside for BTC’s price.
Key Data Comparison
| Index | Compound Annual Growth Rate (2011-2025) | Standard Deviation | Sharpe Ratio | Last Year Return | Last 5 Years Return | Last 10 Years Return |
|---|---|---|---|---|---|---|
| Bitcoin | 102.41% | 150.50% | 0.83 | 69.5% | 60.2% | 81.6% |
| S&P 500 | 16.65% | 13.78% | 1.11 | 10.1% | 16.7% | 13.2% |
Market Sentiment and Investor Behavior: A Shift in Cryptocurrency Perception
Investor sentiment played a crucial role in Bitcoin’s 2025 struggles. Data indicated historically low sentiment, with substantial Bitcoin ETF outflows of $3.79B. Miners, facing collapsing hashrate prices, were forced to liquidate holdings, adding technical downward pressure. The sentiment in the market was bearish. This shift in sentiment underscores the vulnerability of cryptocurrency to macroeconomic and governance risks. Sentiment is a key indicator of potential price action and should be carefully monitored by investors.
Correlation Analysis: Bitcoin and S&P 500 Relationship
The correlation between Bitcoin and the S&P 500 is a key consideration for portfolio diversification. While historically, Bitcoin has shown a relatively low correlation with traditional asset classes, periods of market stress can lead to increased correlation. In late 2025, as macroeconomic uncertainty grew, the correlation between Bitcoin and the S&P 500 may have temporarily increased as both were impacted by the same risk-off sentiment. Understanding this dynamic is crucial for investors seeking to diversify their portfolio and manage risk effectively. There is an inverse relationship between the two at times.
Measuring Vol and Bull Run Potential: On-Chain Data Insights
Assessing Bitcoin’s vol and potential for a bull run requires analyzing on-chain data and market indicators. Metrics such as active addresses, transaction volume, and hashrate can provide insights into the health and activity of the Bitcoin network. Monitoring accumulation trends among long-term holders and the behavior of leveraged futures traders can help gauge market sentiment and potential turning points. The ‘True Market Mean,’ reflecting the average cost basis for BTC investors, serves as a key level to watch for potential support. Analysis of these indicators is crucial for determining the likelihood of a sustained upward trend.
Historical Return Calculation: Bitcoin vs. Gold vs. Benchmark
The historical return calculation of Bitcoin offers a stark contrast to gold and traditional benchmarks like the S&P 500. While Bitcoin’s average annualized return over the last 10 years has been an impressive 81.6%, compared to the S&P 500’s 13.2%, its volatility is substantially higher. Gold, often considered a safe-haven asset, typically offers lower returns but with significantly less risk. Investors must weigh the potential for outsized gains against the risk of sharp declines when allocating capital to Bitcoin. You need to consider what you can afford to lose.
Deep Dive: Market Analysis
As of November 2025, Bitcoin traded around $89,800, marking a more than 20% decline over the past month and approximately 30% off its record high near $126,000 from early October. This decline occurred amid liquidations of leveraged crypto positions, with traders shifting to risk-off assets like gold due to mixed economic data and concerns about AI stock valuations. Compass Point noted that the pressure on Bitcoin may persist into year-end as newer investors, especially those who bought above $100,000, may sell in a panic. The ‘True Market Mean’ of $82k acted as a bounce point, aligning with the $83k average cost basis for ETF holders. To signal a bottom, look for higher accumulation by long-term holders and negative perpetual funding rates.
Frequently Asked Questions
Is Bitcoin correlated with S&P 500?
Historically, Bitcoin has shown a low correlation with the S&P 500, but this correlation can increase during periods of market stress.
What if I invested $1000 in Bitcoin 10 years ago?
Based on historical data, a $1000 investment in Bitcoin 10 years ago could have grown substantially, potentially to over $389,061, due to Bitcoin’s high average annual returns.
Did Tesla dump 75% of its Bitcoin?
This question cannot be answered from provided context.
Is Bitcoin part of the S&P 500 today?
No, Bitcoin is not part of the S&P 500.
Conclusion
Looking ahead, Bitcoin’s trajectory depends on macroeconomic conditions, regulatory developments, and investor sentiment. Monitoring the Federal Reserve’s policy decisions and regulatory clarity from the SEC will be crucial. While short-term volatility is expected, long-term investors should focus on the fundamental drivers of Bitcoin’s value, including its fixed supply and increasing adoption. A bullish outlook depends on rebuilding investor trust and fostering a more stable regulatory environment. Always consider your time horizon and what you can afford to lose.
