You’d be forgiven for missing bitcoin’s new record high of about $111,800 on May 22, as the move towards this new price benchmark arrived with less fanfare than in previous cycles.
Perhaps the more interesting story was bitcoin’s outperformance relative to US stocks since April, particularly during the week before the new high. In that week the S&P 500 fell by nearly 2% while the price of bitcoin rose by 7%.
Both markets have been sensitive to US President Donald Trump’s tariff announcements and to broader uncertainty about his policy direction, but on May 18 a clear divergence emerged. Bitcoin and the S&P 500 began to move in opposite directions: the cryptocurrency continued to rise even as broader financial markets remained volatile, while the S&P 500 experienced steep sell-offs in response to economic pressures.
Patrick Bush, senior investment analyst at global investment firm VanEck, said in May: “We expect the relationship between equities and bitcoin to dissolve further as individual investors, corporations and central banks recognise bitcoin as a sovereign, uncorrelated store-of-value asset.”
Many see bitcoin as a kind of turbocharged tech stock. It typically moves in tandem with the broader stock market, but with greater fluctuations
These brief moments of decoupling reignite the debate over bitcoin’s role as a hedge against systemic risk. “The most recent price action may have begun to validate the view that bitcoin is not just the 501st company in the S&P 500,” analysts at research firm Block Scholes noted following its April performance. Still, these divergences often prove to be short-lived, with decoupling trends fizzling out as quickly as they started.
Many see bitcoin as a kind of turbocharged tech stock. It typically moves in tandem with the broader stock market, but with greater fluctuations. Every now and then, though, it moves to its own rhythm. Take April and May during the trade war tensions. While stocks were sliding, the bitcoin price showed resilience and even pushed higher. This behaviour tends to get professional investors interested, especially those looking for investments that can move differently from the rest of their portfolio when markets get rough.
So is bitcoin a safe haven from broader market turmoil? There’s no easy answer. Not yet, anyway. Sometimes it acts like a safe-haven asset, but mostly it behaves like a risk asset. Still, those moments when it breaks away from traditional markets might be more intriguing than new record highs.
De Wit is South Africa country manager at Luno
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