Haciyev Reşit 
As the year draws to a close, a notable development is emerging in the Bitcoin market. According to data compiled by Bloomberg, Bitcoin is on track to end the year with a negative performance, diverging sharply from traditional markets for the first time in a decade. This situation raises important questions for investors, especially after several years of strong upward momentum.
The Historical Gap Between Bitcoin and the S&P 500 Is Widening
The S&P 500 index has risen more than 16% in 2025, delivering a strong rally, while Bitcoin has declined by roughly 3% over the same period. As a result, the performance gap between the two assets has become the most pronounced since 2014. That year too, equities rallied strongly while Bitcoin declined, creating a similar divergence.
After surging above $126,000 earlier this year to hit a record high, Bitcoin has fallen sharply over the past two months. Forced liquidations, declining investor interest, and rising uncertainty have pushed Bitcoin down to $88,135, nearly 30% below its all-time high in October.
Why Is the Market Diverging? Risk Appetite Isn’t Flowing Into Bitcoin
During the pandemic, low interest rates strengthened the correlation between Bitcoin and equities, sending both assets into synchronized rallies. But in 2025, the picture is entirely different. AI-focused tech stocks are hitting records, drawing capital into the stock market. Bitcoin, however, has been unable to benefit from the current wave of risk appetite.
Meanwhile, gold and silver are approaching historic levels, signaling that investors are shifting toward safe-haven assets. This has further weakened Bitcoin’s momentum.
Matt Maley, chief strategist at Miller Tabak + Co., explains:
“Bitcoin is a momentum asset. For most of the last decade, if there was strong momentum, Bitcoin would lead the market. This year, precious metals absorbed much of the momentum inflows that Bitcoin typically captures.”
Weakening Sentiment: ETF Inflows and Technical Indicators
The slowdown in inflows into Bitcoin ETFs suggests that institutional investors are acting more cautiously. Several key technical indicators are also losing strength, indicating that Bitcoin is struggling to sustain its rallies. Shorter daily high sequences confirm that price action has become more fragile.
This May Be a Natural Correction
Stephane Ouellette, CEO of Toronto-based FRNT Financial, offers a more optimistic view. According to him, the current situation is merely a natural correction following Bitcoin’s extraordinary performance over the last two years. Ouellette notes that Bitcoin has still outperformed the S&P 500 by a wide margin over the past 12 months, a trend supported by the crypto-friendly stance of the Trump administration. In his view, equities are simply staging a “catch-up rally.”
He states:
“Calendar-year comparisons don’t always reflect reality. As of early October, Bitcoin had significantly outperformed the S&P 500 over the previous twelve months. This could be a normal pullback in a strong bull market.”
Assessment
Bitcoin’s divergence from traditional markets is shaping up to be one of the most striking market developments of the past decade. As investor sentiment weakens, the powerful rally in equities is overshadowing Bitcoin’s momentum. However, some analysts argue that the decline is temporary and that the long-term outlook remains intact. In the coming period, the market’s direction will be determined largely by risk appetite, ETF inflows, and macroeconomic developments.
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