Bitcoin dropped from nearly $83,000 to around $60,000 between May and early June, marking a decline of over 25% in the same period that saw US equities set new records.
Divergent Performance Between Bitcoin and US Stocks
While key US stock indexes continued their upward momentum, capital inflows focused largely on equities and artificial intelligence-related assets, according to on-chain analytics provider Glassnode. The firm noted that Bitcoin experienced softer demand while investors favored other risk assets.
Glassnode, a leading platform analyzing public blockchain data to generate insights into cryptocurrency activity, reported that the rotation into equities left Bitcoin “significantly neglected.”
Glassnode highlighted, “Bitcoin has been significantly neglected in the recent market rotation, with demand weakening as capital flows toward equities and AI-related sectors.”
This divergence underscores shifting investor appetites during a period of robust stock-market gains despite a weaker climate for major cryptocurrencies.
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AAPLWeak Sentiment and ETF Outflows Compound Bitcoin’s Struggles
Consumer sentiment lapsed to new lows as stocks advanced. Glassnode cited data measuring US stock market confidence at below 3,000 in May, while the University of Michigan’s Consumer Sentiment Index fell to a record low of 44.8, reflecting rising inflation concerns and geopolitical tensions in the Middle East.
Despite these anxieties, the S&P 500 ended May at a record 7,580.06, representing an 11% year-to-date increase. The tech-heavy Nasdaq climbed 16% year-to-date by late May, with the Dow Jones Industrial Average advancing approximately 6% over the same period.
In contrast, Bitcoin’s value retreated sharply. The cryptocurrency’s price tumbled more than 25% in May and early June, descending from about $83,000 to roughly $60,000.
US spot Bitcoin exchange-traded funds (ETFs) recorded 13 consecutive sessions of net outflows in May, the longest stretch since the funds were introduced in January 2024. Total net outflows hit roughly $4.4 billion, with the largest single fund, BlackRock’s IBIT, accounting for $3.3 billion of the withdrawals.
The selloff gained momentum in early June as heightened tensions between the US and Iran triggered a spike in oil prices and inflation expectations, sending US Treasury yields above 5% and intensifying pressure on risk-sensitive assets.
Mini dictionary: Spot Bitcoin ETF – An exchange-traded fund that directly holds Bitcoin, allowing investors to gain exposure to the cryptocurrency’s price movements through regular stock exchanges without needing to own or manage Bitcoin directly.
| Asset | Performance (May–Early June 2024) | YTD Change |
|---|---|---|
| Bitcoin | Down 25% ($83,000 → $60,000) | Not specified |
| S&P 500 | Up 5% (May 1 to May 29) | Up 11% |
| Nasdaq | Up 5% (May 1 to May 29) | Up 16% |
| Dow Jones | Up 3% (May 1 to May 29) | Up 6% |
AI and Tech Sector Dominate Equity Gains
The ongoing rally in equities concentrated in large technology and semiconductor companies, fueled by robust corporate earnings and expanded investment in artificial intelligence infrastructure.
Persistent outflows from Bitcoin ETFs and subdued demand suggest Bitcoin remains vulnerable to further risk-off market dynamics, particularly as equities continue to capture most new investment.
The recent divergence between high-flying stock benchmarks and falling Bitcoin prices has prompted questions about the cryptocurrency’s effectiveness as a macroeconomic hedge and the sources of sustained demand in digital asset markets.
Some observers note that ETF withdrawals and reduced trading activity point to a thinner and more volatile market for Bitcoin, even as traditional markets attract fresh capital.
