Bitcoin fell more than 25% from roughly $83,000 to around $60,000 in May and early June, even as US stocks climbed to record highs,
According to data highlighted by on-chain analytics firm Glassnode on August 17, the divergence, underscores how capital has flowed into equities and AI-related assets while demand for Bitcoin has weakened.
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Glassnode says Bitcoin has been “significantly neglected” in the rotation, pointing to weaker demand for the cryptocurrency at a time when other risk assets were rallying.
Consumer Sentiment Hit a Record Low as Stocks Rallied
The divergence emerged against a backdrop of weakening consumer sentiment and strong equity-market performance.
According to Glassnode data, Consumer Confidence fell below 3,000 on its measure of the US stock market in May. Separately, the University of Michigan’s Consumer Sentiment Index fell to an all-time low of 44.8 in May.
The decline came as concerns about inflation and the economic effects of escalating conflict in the Middle East weighed on consumers.
At the same time, US equities moved in the opposite direction. The S&P 500 closed at 7,230.12 on May 1 after six consecutive weekly gains, then closed at a fresh record of 7,580.06 on May 29, up roughly 11% year-to-date. The Nasdaq gained about 16% YTD and the Dow around 6% YTD over the same period.
Bitcoin ETFs Saw Heavy Outflows
Meanwhile, Bitcoin followed a markedly different path.
Its price declined more than 25% during May and into the first days of June, falling from around $83,000 to approximately $60,000.
US spot Bitcoin ETFs recorded 13 consecutive days of net outflows during the month, the longest streak since the products launched in January 2024. Total outflows reached approximately $4.4 billion, with BlackRock’s IBIT alone accounting for around $3.3 billion.
Why Bitcoin and Stocks Diverged
Bitcoin’s decline accelerated in early June as escalating US-Iran tensions drove oil prices higher, lifted inflation expectations to 3.9%, up from 3.5% in April, and pushed US Treasury yields up more than 5%, adding further pressure on risk assets.
At the same time, the equity rally was concentrated in large AI and semiconductor companies. Strong corporate earnings and continued spending on artificial intelligence infrastructure helped support investor demand for parts of the technology sector.
The result was an unusual divergence: stocks continued to attract capital while Bitcoin experienced falling prices and significant ETF withdrawals.
Why This Matters
The divergence raises questions about Bitcoin’s role as a macro hedge and about the sources of demand supporting the cryptocurrency market.
Persistent ETF outflows and thin structural demand could keep Bitcoin exposed to risk-off pressure even if broader markets keep climbing.
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