Crypto Rides Wall Street Wave as Bitcoin and Stocks Reunite in Rally
Correlation Between Bitcoin and Stocks Tightens Again as Market Eyes Fed Liquidity and Corporate Strength
The narrative of crypto “decoupling” from traditional financial markets is facing new doubt as Bitcoin and major equities surge in lockstep. Over the past ten days, Bitcoin’s intraday moves have mirrored those of the S&P 500, casting uncertainty over whether digital assets are truly breaking free from legacy markets — or simply riding the same macroeconomic wave.
Crypto and Stocks: More Alike Than Different, For Now
Cryptocurrency investors have long hoped that Bitcoin could diverge from the behavior of stocks, particularly during times of economic or geopolitical stress. But reality tells a different story. Despite rising trade tensions and weak U.S. manufacturing data, both equities and digital assets have continued their climb — thanks largely to Federal Reserve liquidity expectations and blockbuster earnings from Big Tech.
Since March, the total crypto market cap has climbed 8.5%, while the S&P 500 has dropped 5.3%. On a six-month timeline, the contrast is starker: crypto is up 29%, equities are down 2%. These figures point to short-term correlation, but long-term divergence, muddying the idea of a clean decoupling.
Markets Shake Off Tariff Fears and Trade Tensions
While trade disputes with Canada, Mexico, and China continue, markets appear to be looking beyond tariffs. The S&P 500 bounced from a bottom of 4,835 on April 7 to 5,635, showing surprising resilience. U.S. and Chinese negotiators have quietly resumed talks, with each side offering sector-specific tariff waivers.
American companies are responding strategically: Microsoft posted a 13.2% year-over-year revenue jump, crediting demand for AI and healthy margins. Meta also exceeded Wall Street expectations with its April 30 earnings report. These results have helped dispel fears of an AI bubble and demonstrate that U.S. companies are adapting to global shifts.
The Fed Takes Center Stage as PMI Data Weakens
Rather than focusing on the five-month low in U.S. manufacturing PMI, markets are turning attention to the Federal Reserve’s next move. After a year of balance sheet reduction, the Fed is now weighing renewed asset purchases to support liquidity — a move that could benefit risk assets like crypto.
If liquidity improves, even a correlated crypto market could thrive. Traders may not need full independence from equities for digital assets to flourish in a supportive macro environment.
No Clear Bottom Yet — But Risk Appetite Is Growing
Despite encouraging trends, it’s premature to call a full market reversal. The S&P 500 still trades below its February peak of 5,800, and the global economy remains fragile. Yet for now, investors seem less risk-averse — and that’s enough to keep crypto and stocks rallying in unison.
In short, the dream of crypto decoupling may be on pause, but as long as liquidity flows and earnings hold strong, the sector doesn’t need isolation to outperform.
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