2025: The bull's design is falling apart – Bitcoin betrays Wall Street

We are in 2025, and the financial market is telling a story never seen before since 2014. While Wall Street celebrates consecutive victories with the S&P 500 soaring over +16%, Bitcoin remains chained in the range between $85,000 and $90,000, retreating by -3% in the same period. Once considered the “high beta partner” of stock growth, the king of cryptocurrencies is experiencing a spectacular decoupling from traditional markets.

The fracture no one expected

Numbers tell an extraordinary story. In the first half of 2025, the Nasdaq Composite gained 21%, while Bitcoin lost nearly 18%. The broad stock index continues to hit new all-time highs; Bitcoin recorded November as the darkest month with a collapse of -17.67%.

According to Bloomberg data, this divergence is particularly extreme compared to previous “crypto winters.” In 2025, the longest series of consecutive daily highs for Bitcoin was only 3 trading days – the lowest in the history of new highs, highlighting how fragile the rally has become.

Why the bull picture has broken

Regulatory uncertainty has halted everything. Despite the Trump administration showing openness toward cryptocurrencies, the regulatory framework remains fragmented. The “Clarity Act” passed by the House does not advance in the Senate, where it faces resistance and requires revisions without a clear voting schedule. Meanwhile, the European Union and Asian authorities are tightening controls on exchanges and stablecoins.

ETFs have paradoxically weakened momentum. When investors can access Bitcoin through traditional channels, crypto-correlated assets lose appeal. SharpLink Gaming, which has accumulated over $3 billion in ETH for staking, faces an unsustainable valuation and bearish technical signals – the risk of ETH being classified as a security adds further pressure.

Leverage has left scars. A massive liquidation in early October wiped out $19 billion in leveraged positions, exposing market fragility. The Federal Reserve has readjusted global liquidity, mainly redirecting it toward equities.

Internal debates on the network and profit-taking. Technical disputes over blockchain have divided the community. Long-term whales are liquidating positions while retail investors, terrified by the quadrennial halving, are retreating from the market.

On the other side: the irresistible strength of stocks

The contrast could not be more stark. The stock market has dominated thanks to surprising corporate earnings: 69% of S&P 500 stocks beat analyst estimates, the best in four years. Nvidia reached a $4 trillion market cap on July 9, lifting the entire AI sector higher.

Wall Street investors have shown almost superhuman resilience: ignoring inflation, tariff tensions, geopolitical threats. When Trump intensified the trade war, the stock market remained near its highs – a phenomenon dubbed the “TACO trade” (Trump Always Chickens Out), the belief that tensions will dissipate.

The ripple effect on related sectors

The decoupling between Bitcoin and stocks has devastated crypto-sensitive sectors. TeraWulf, a crypto mining company, reports +120% annual growth but with increasing debt – analysts fear that a Bitcoin crash could make the debt unmanageable.

This decoupling ironically offers new diversification opportunities, but only for those who know how to navigate the turbulent waters of assets that no longer move in sync.

Voices of the institutional: divide et impera

Mike McGlone of Bloomberg Intelligence has no doubt: “Gold and stocks reach all-time highs, Bitcoin – the quintessential risk asset – dissolves.”

Yet opinions diverge. Stéphane Ouellette (FRNT Financial) believes that Bitcoin is simply undergoing a “recovery” after outperforming massively – over two years, Bitcoin continues to outperform the S&P 500. However, Standard Chartered has scaled back its forecasts: from $200,000 to $100,000 by the end of the year, shifting the long-term target from 2028 to 2030.

Matthew Hougan (Bitwise) warns: retail sentiment is poor, and the downside space may not be over.

What could turn the tables

Senate decisions on the “Clarity Act” will become crucial – regulatory clarity could revive lost institutional demand.

Global liquidity remains the key factor. Derek Lin (Caladan) clearly reminds us: Bitcoin bull markets in 2017 and 2021 were not only driven by halving but also by a flow of global liquidity. With the resolution of the federal shutdown, this liquidity could return.

Bitcoin is evolving into a macro asset. No longer reactive only to supply shocks, it now responds to monetary policy, liquidity, and the dollar’s performance. The correlation with the S&P 500 has increased since 2020 – if the stock market maintains its profits, Bitcoin could follow.

Jack Kenneth (Nansen) summarizes: “Bitcoin today is a macro asset in institutional portfolios, reacting more to liquidity, policy, and the dollar than to traditional crypto mechanisms.”

While Wall Street analysts try to explain Trump’s next move, Bitcoin holders are watching the charts between the support of $85,000 and the previous high of $125,000, marking where the next chapter of the decade-long cycle will begin.