Bitcoin is no longer outpacing the market: how Wall Street overtook the leading cryptocurrency

Over the past three months, Bitcoin outperformed the S&P 500 Index* in only one-third of trading sessions. Despite Bitcoin posting gains on certain days, its performance relative to the U.S. stock market was its worst in the past six years.

* S&P 500 is one of the key U.S. stock market indexes, tracking changes in the combined value of shares in approximately 500 of the largest publicly traded American companies. It includes companies from various sectors of the economy, such as Microsoft, Apple, Amazon, Nvidia, and JPMorgan Chase. The weight of each company in the index depends primarily on its market capitalization: the higher a company's market valuation, the greater the impact of changes in its share price on the index. The S&P 500 is often used as a benchmark for assessing the overall state of the U.S. stock market and comparing the returns of different assets.

In recent days, Bitcoin posted gains and outpaced the stock market in terms of growth. However, according to the Glassnode analytics platform, such instances are becoming increasingly rare.

Over the past three months, Bitcoin delivered better returns than the S&P 500 in only 37.8% of trading sessions. Analysts note that this is the longest period in the past six years during which Bitcoin has underperformed the key U.S. stock market index by such a significant margin.

The decline in this indicator is clearly visible over time. In 2023 and early 2024, Bitcoin outperformed the S&P 500 on approximately 50–60% of trading days. Throughout 2025, this share increasingly fell below 50%, and by 2026, it had dropped to 37.8%.

For Bitcoin, traditionally regarded as a riskier but potentially more profitable asset, this trend suggests a shrinking risk premium. Investors still face high BTC volatility but are increasingly less likely to receive additional returns in exchange for that risk compared with the stock market.

Analysts must now determine whether this is a temporary deviation or the beginning of a lasting trend.

Traditional assets rise while Bitcoin falls

When asset returns are compared not by individual trading sessions but over the period from the beginning of 2026 through August 18, Bitcoin also significantly underperforms.

During this period, the price of BTC fell by almost 27%. Meanwhile, the S&P 500 rose by 14%, the NASDAQ* gained 19%, and gold appreciated by almost 2%. This divergence is particularly noteworthy given that Bitcoin's performance had previously often correlated with all of these assets.

* NASDAQ refers to the Nasdaq Composite stock index, which includes shares of several thousand companies traded on the Nasdaq exchange. Technology companies account for a significant share of the index, making it particularly sensitive to changes in the valuations of major technology companies.

BTC's current relative performance is approximately at the same levels observed in the first months of 2022, before the beginning of a prolonged bear market*. At the time, the crisis was accompanied by the collapse of FTX, one of the world's largest crypto exchanges at the time, as well as the bankruptcy of dozens of other major companies in the industry.

* A bear market is a prolonged period of substantial asset-price declines accompanied by predominantly negative expectations among market participants. A market is generally described as bearish when prices fall by at least 20% from a recent high. Reduced trading activity, declining investor interest, widespread asset sales, and an extended absence of a sustained recovery characterize such a market. The term is associated with the image of a bear striking downward with its paw when attacking, symbolizing falling prices.

By August 2026, the market had not experienced a shock comparable in scale to the collapse of FTX. Nevertheless, experts consider the current period one of the most difficult in the entire history of the cryptocurrency market.

In July 2026 alone, at least five crypto exchanges announced their closure, bankruptcy, or liquidation. One of the most notable losses was BitMEX, a platform that had operated since 2014. Almost simultaneously, BitMart, previously ranked among the twenty largest exchanges by trading volume, announced it was ceasing operations.

The AscendEX exchange suspended operations on July 1, and on July 16, a court declared the Dutch platform Knaken bankrupt. Another major loss was EXMO, one of the oldest Eastern European crypto exchanges, which had operated since 2014.

At the same time, about 100 other major crypto companies ceased operations.

Bitcoin miners began shifting their infrastructure en masse toward servicing artificial intelligence projects.

Mining companies are converting their facilities into data centers for high-performance computing. They are using their existing power connections, cooling systems, land, and network infrastructure. However, ASIC miners themselves are unsuitable for processing AI workloads and must be replaced with servers equipped with graphics processing units.

The shift to servicing AI projects lets companies diversify revenue amid declining Bitcoin-mining profitability and rising demand for computing capacity.

For example, Bitfarms — one of North America's largest publicly traded miners, known for its network of industrial data centers and its predominant use of hydropower — stopped mining Bitcoin at its U.S. facilities after rebranding as Keel and began converting them for artificial intelligence applications.

A similar transformation is taking place in the trading segment of the crypto industry: after the miners, exchanges and their customers are looking for new revenue sources outside the cryptocurrency market.

Both retail crypto traders and crypto exchanges themselves are showing interest in traditional stocks — a shift in priorities that would have been difficult to imagine during previous market cycles.

Crypto exchanges are gradually evolving into universal trading platforms by adding stocks, commodities, and tokenized versions of traditional assets. In this way, they are attempting to offset declining activity in the cryptocurrency market and attract users interested in several asset classes at once.

ETFs were approved and the Government offered support — so why didn't Bitcoin rise?

The paradox of the current cycle is that the period that began in 2024 is considered one of the most favorable for the institutional adoption of cryptocurrencies and the development of regulation.

In early 2024, Bitcoin-based exchange-traded funds — Bitcoin ETFs* — were approved in the United States. The introduction of regulated funds made Bitcoin more accessible and legitimate within the traditional financial system. Market participants expected ETF-driven capital inflows to increase demand for BTC, support its price, and attract pension, investment, and asset management funds that had previously found it difficult or impossible to invest in the cryptocurrency directly.

* A Bitcoin ETF is an exchange-traded investment fund linked to the price of Bitcoin. Its shares are traded on a conventional stock exchange, allowing investors to gain exposure to the performance of the first cryptocurrency through a traditional brokerage account without buying or storing Bitcoin directly.

Crypto market participants also tied expectations to the new U.S. presidential administration taking office in early 2025. They anticipated a more favorable approach to the crypto industry: less regulatory pressure, the development of clear rules for digital assets, easier access to banking services for crypto companies, and an end to the practice of regulating the industry primarily through lawsuits.

Investors also expected support for mining and blockchain projects within the United States, the adoption of dedicated legislation for the crypto market, and the recognition of Bitcoin as a national reserve asset. Some of these expectations were later realized, but even they did not allow BTC to maintain a significant advantage over traditional assets.

Bitcoin: high risk without its former outsized returns

Over a longer time horizon, the gap between Bitcoin and traditional investment instruments has also proved relatively small.

Since 2021, gold and the NASDAQ Index have gained more than 130%, the S&P 500 has risen by approximately 105%, and the price of Bitcoin has increased by about 120%.

Over the selected period, BTC maintained strong returns but failed to establish a significant advantage over stock indexes and gold. This is especially evident given the cryptocurrency's higher volatility: price fluctuations remained considerably greater than those of most traditional assets.

Thus, since 2021, BTC has failed to outperform traditional assets in terms of growth. Previously, the situation looked different: Bitcoin appreciated by more than 300% in 2020 and by more than 1,300% in 2017.

As Bitcoin's market capitalization grows, it requires ever-larger capital inflows to replicate its previous growth rates. Consequently, multiplying its value several times over is becoming more difficult than it was during the market's early stages, when trading volumes and the asset's overall valuation were significantly lower.

Glassnode analysts point out that Bitcoin can still deliver strong growth, but its excess returns relative to traditional assets have gradually diminished over the years.