Stocks add $2T in a month. Bitcoin adds a shrug 🤷‍♂️

The S&P 500 has gained 3.12% since the start of August, adding roughly $2.1 trillion in market capitalization and lifting its total value to a record $70.5 trillion, with the index at 7,723 points. The Nasdaq and Dow are also higher, leaving Wall Street in full risk-on mode by most measures. Bitcoin, by contrast, is up just 2% over the same stretch, trading around $64,600, a level it first touched in July.

Analysts attribute the divergence to the nature of the equity rally. Adam Haeems, head of asset management at Tesseract Group, which manages more than $500 million in client assets, said the move is concentrated in areas to which bitcoin has little direct exposure. "Partly because the equity rally is being driven by areas to which bitcoin has little direct exposure, particularly AI and semiconductor stocks," Haeems said. Lower oil prices tied to a potential reopening of the Strait of Hormuz, disrupted during the Iran war, are also benefiting equities first. "Lower oil prices resulting from a reopening of the Strait of Hormuz could benefit both markets, but through different channels. Equities receive a relatively immediate benefit through lower business costs. For bitcoin, the effect runs through inflation expectations and then Federal Reserve policy. That takes longer, and the outlook for September remains uncertain," Haeems added.

Paul Howard, senior director at market making firm Wincent, echoed that view. "The stock rally is biased towards AI and mega-caps which doesn't necessarily translate into crypto flows," Howard said. "The crypto market rally driven previously by ETF demand the last 2y has been subdued as it now seeks its own catalyst independent of US equities. This likely will come in Q4 when the market expects regulatory clarity and continued stablecoin growth."

Crypto-specific headwinds are also weighing on sentiment, including the $120 million Coldcard exploit, ongoing uncertainty around the Clarity Act, and reports that Strategy has been liquidating portions of its $BTC holdings. Traders have also remained cautious ahead of an expected October cycle bottom, contributing to muted price action in $BTC despite the broader equity rally.