Bitcoin lags as Wall Street rally nears crypto market’s total value

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Bitcoin lags as wall street rallies

Highlights

S&P 500 rises 3.12% this month to a record $70.5 trillion market capitalization, outpacing bitcoin’s 2% gain, as AI and semiconductor stocks lead the rally.
Analysts note bitcoin has limited exposure to current stock market drivers, with lower oil prices benefiting equities faster than digital assets amid Middle East shipping normalization.
Spot bitcoin ETFs see uneven institutional demand: U.S.-listed funds net a $61.53 million outflow breaking a three-week inflow streak, despite $626 million intake this week, underscoring shaky market participation.

Drivers behind the performance gap

As reported by CoinDesk, U.S. equities are extending a strong risk-on run, with the S&P 500 up 3.12% this month and its total market capitalization reaching a record $70.5 trillion at 7,723 points. The Nasdaq and Dow are also buoyant, but bitcoin rises only 2% over the same period and remains near levels it already reached in July.

Analysts say the divergence reflects the nature of the stock rally, which is concentrated in AI and semiconductor names rather than a broad macro move that would typically lift higher-beta assets such as bitcoin at the same time. Adam Haeems, head of asset management at Tesseract Group, says bitcoin has little direct exposure to the areas now driving equities.

He adds that lower oil prices and hopes for a return to normal shipping through the Strait of Hormuz, after disruption linked to the Iran war, are supportive for risk assets overall. Still, equities benefit more immediately through lower business costs, while any support for bitcoin would likely come later through inflation expectations and possible Federal Reserve policy effects.

ETF flows and crypto-specific pressure

Beyond the stock market rally, bitcoin also faces crypto-specific pressures that weigh on sentiment and trading activity. Analysts cited in the report point to issues including the Coldcard hack and a reluctance among traders to take larger positions before an expected October cycle bottom.

Institutional demand through spot bitcoin ETFs also remains uneven. U.S.-listed funds record an outflow of $61.53 million, ending a weak three-week inflow streak, according to SoSoValue data, although they attract $626 million this week, the strongest intake since early May.

For the crypto market, that suggests broader participation is still inconsistent even as Wall Street pushes deeper into record territory. Unless ETF inflows stay firm and macro support becomes more direct, bitcoin may continue to lag a stock rally that is being led by themes largely outside digital assets.

Our earlier coverage of the S&P 500’s tech-led rebound explained that the index’s push back toward record highs was driven by a narrow cluster of mega-cap AI-linked stocks rather than a broad-based market advance. We also noted that this kind of concentrated surge can boost near-term momentum but may raise reversal risk, while upcoming U.S. payrolls data was expected to have limited impact on the Federal Reserve outlook unless it sharply surprised.

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