Bitcoin Separates from Stock Market Trends in Late 2025

The US Federal Reserve recently announced its third interest rate reduction of the year, benefiting US stock markets while Bitcoin initially slipped before regaining strength. This trend has characterized the latter half of 2025. Although Bitcoin's capital inflows are increasingly linked to traditional stock market investors, the cryptocurrency has notably detached from stock market movements.

Key Takeaways

Bitcoin has diverged from stock market trends in the second half of 2025.
Throughout the last six months, Bitcoin faced an 18% decline, while major US stock indices posted significant gains.
Key events shaping Bitcoin's trends included the GENIUS Act and the Federal Reserve's interest rate cuts.
Despite seasonal patterns, Bitcoin struggled in November, marking its worst month of the year.
Analysts have lowered year-end projections for Bitcoin, indicating a more cautious outlook for the cryptocurrency market.

Bitcoin decouples from stocks in the second half of 2025

In the past six months, Bitcoin has experienced an almost 18% decline. By contrast, the three primary US stock indices have shown robust and consistent gains: the Nasdaq Composite rose by 21%, the S&P 500 increased by 14.35%, and the Dow Jones Industrial Average climbed by 12.11%. However, Bitcoin achieved significant milestones, including reaching new all-time highs and avoiding the typical "red September" for the third consecutive year.

Here’s a closer look at how Bitcoin's separation from stocks has intensified throughout the year's second half.

Bitcoin correlated with major equity indices in Q3 but started to diverge in Q4.

July: The GENIUS Act Boosts Cryptocurrency

In July 2025, strong performance in equities and a robust risk appetite persisted despite significant tariff announcements. Trade-related rhetoric caused some momentary turbulence, but markets quickly redirected their focus on corporate earnings and growth fundamentals.

On July 9, AI chip giant Nvidia reached a historic valuation of $4 trillion. That very day, equities dismissed trade fluctuations, with the S&P 500 and Nasdaq hitting new record highs despite a 50% tariff on copper. Bitcoin closed July with an 8.13% increase, marking its best monthly performance for the latter half of the year, including December. The signing of the GENIUS Act by US President Donald Trump injected new optimism into the crypto sector, especially for stablecoin businesses.

Equities move sideways while Treasurys and stablecoins uplift crypto markets. Source: TradingView

Corporate adoption of Bitcoin continued to grow, with businesses adding it to their treasury strategies. Interest in other major cryptocurrencies such as Ether and Solana started to surge in July as well.

August: Powell's Remarks Catalyze Ether to New Heights

August was marked by rising expectations that the Federal Reserve would soon cut interest rates, fueling a broad rally across traditional markets while crypto surged even more dramatically. Bitcoin achieved a new all-time high of nearly $124,000 on August 14, as the US dollar eased amid escalating trade disputes.

The Jackson Hole Economic Symposium refocused market attention on monetary policy. On August 22, Fed Chair Jerome Powell hinted that further rate cuts might occur later in the year, leading to Ether achieving a new all-time high.

The Fed's dovish signal drives Ether to unprecedented heights. Source: CoinGecko

Though equities reacted positively, Bitcoin couldn't maintain its momentum. After a brief spike immediately post-Powell's speech, Bitcoin resumed its decline, ending August down by 6.49%.

September: The First Interest Rate Cut of 2025

September typically signifies a challenging month for Bitcoin, often referred to as "red September," due to its historical negative average returns. However, 2025 witnessed Bitcoin breaking this trend, achieving its third straight positive September month. The increase came after the Fed enacted its first rate cut of the year, a 25-basis-point reduction correlated with signs of a cooling labor market. Bitcoin wrapped up the month with a 5.16% gain.

Bitcoin's potential to break the 'red September' trend.

Equities also climbed, building on their third-quarter rally as investors anticipated additional monetary easing in October. Nonetheless, Bitcoin faced internal struggles. The community became divided over a significant network upgrade that proposed removing limits on embedding arbitrary data onto the blockchain. Bitcoin Core, widely used by miners and node operators, supported this upgrade, while some opposed it, citing concerns about perceived spam on the blockchain.

October: Trump Announces 100% Tariffs on China

Bitcoin experienced another all-time high on October 6, but the month was ultimately marred by the largest liquidation event in its history, with approximately $19 billion in positions wiped out. Contributing factors included price glitches on Binance and the industry's reliance on futures trading, which exacerbated forced liquidations.

The catalyst for this sell-off was a social media post by President Trump threatening 100% tariffs on Chinese imports, triggering a sharp decline across crypto and equity markets. While October is often dubbed "Uptober" for its typically strong performance, 2025 marked a notable exception, with Bitcoin ending the month down by 3.69% as major stock indices rebounded from trade-related turmoil.

Trump's social media post instigates a crypto liquidation spree. Source: Donald Trump

As the month wrapped up, the Fed announced its second consecutive rate cut, bringing down the federal funds rate by another 25 basis points. Meanwhile, the US government shutdown continued through October, marking a historic long duration.

November: The Conclusion of the Government Shutdown

November is historically recognized as Bitcoin's strongest month, averaging a gain of 41.12%, which is more than double the October returns of around 20%. In 2025, however, November turned out to be Bitcoin's worst-performing month, depreciating by 17.67%. Selling pressure ramped up throughout the month, pushing Bitcoin below the $100,000 threshold by mid-November.

November is typically Bitcoin's best month, yet it became the worst month of 2025. Source: CoinGlass

The gap between Bitcoin and equities grew wider. Stock markets remained mostly stable as the US government shutdown came to an end, although there were lingering concerns about a potential AI-driven bubble. Investor anxiety eased slightly later in November when Nvidia reported record earnings for Q3, stabilizing the sentiment in technology stocks.

Bitcoin's Year-End Price Target Adjusted

As of December, Bitcoin has seen a modest 2% increase, replicating moderate gains in major equity indices as well. Currently, Bitcoin's average return for December is at 4.54%.

Historically, Bitcoin does not slow down during the holiday season, and past years have proven volatile, such as December 2020, when Bitcoin surged nearly 47% amid significant market news, including a lawsuit against Ripple Labs.

However, much of the optimism around a potential year-end rally for Bitcoin has dwindled in 2025. Analysts have adjusted their price expectations for the cryptocurrency downward, including Standard Chartered. The bank revised its previous year-end Bitcoin price target from $200,000 to $100,000 and postponed its longer-term projection of Bitcoin reaching $500,000 from 2028 to 2030.

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