Bitcoin Trails S&P 500 and Nasdaq in 2026 – Despite Recovery Since July

Bitcoin posted its weakest performance against US stock indices in recent history during the first half of 2026: the cryptocurrency fell around 33 percent and was trading below $59,000 at the end of June, while the S&P 500 and Nasdaq benefited from a narrowly concentrated AI rally. Since the low in early July, Bitcoin has made substantial gains – but still lags behind the stock indices.

Dramatic Value Loss Since October 2025

From its all-time high of $126,198 on October 6, 2025, the world's largest cryptocurrency lost more than 40 percent of its value by February 2026. By mid-June 2026, Bitcoin had fallen to $66,521.59 – a decline of $39,100 compared to the prior year. Market capitalization shrank by more than $2 trillion since the October peak.

At the end of March 2026, Bitcoin recorded the longest underperformance streak against stocks in its history. Historical data based on rolling 63-day periods suggested that such phases in the past preceded sharp recoveries.

S&P 500 Outpaces Bitcoin Over Five Years

Over the five-year period from July 1, 2021, to June 30, 2026, the S&P 500 achieved a return of around 74 percent, Bitcoin of around 68 percent: $1,000 in the index became approximately $1,736, in Bitcoin approximately $1,676 – with significantly higher volatility.

Goldman Sachs Research had issued a 2026 price target of 7,600 points for the S&P 500, with expected earnings per share growth of 12 percent. This level was nearly reached by the end of June 2026 at around 7,500 points – driven by a narrowly concentrated sector.

AI Stocks Dominate the Market

The strength of the S&P 500 in 2026 is based almost exclusively on artificial intelligence companies. According to a Jefferies analysis, AI firms generated over 80 percent of the index's annual earnings – without these companies, the S&P 500 would have risen only 2 percent.

Profit estimates for the AI sector have risen more than 30 percent since mid-2025. For 2026 and 2027, analysts expect AI companies to achieve average annual earnings growth of 38.5 percent, compared to 11.9 percent for other sectors.

Massive Outflows from Bitcoin Funds

Spot Bitcoin funds recorded net outflows of around $5.2 billion through June 29, 2026 (Farside Investors). June was the worst month at around $4.5 billion since the products' launch in early 2024; over the entire first half, outflows totaled $5.4 billion – the first negative half-year ever. At the same time, Bitcoin miners came under pressure: JPMorgan estimated average production costs in June at $78,000 per coin, while Bitcoin was trading at around $62,500.

Strategy (formerly MicroStrategy), one of the largest institutional Bitcoin holders, sold holdings for the first time since 2022 on June 1, 2026 – initially just 32 Bitcoin worth around $2.5 million. At the end of June, the company announced it could sell Bitcoin worth up to $1.25 billion as part of restructuring its financing. Crypto exchange Binance, meanwhile, withdrew its application for a license under the EU's MiCA regulation at the end of June and discontinued its services for EU customers effective July 1, 2026 – it had never obtained a MiCA license.

Deleveraging Impacts Crypto Market Harder

Forced unwinding of leveraged positions accelerated in early 2026 when Bitcoin fell below $70,000 in early February. This deleveraging mechanism works differently in crypto markets than in equities: while stock markets can rise even with moderate profit expectations, crypto markets respond primarily to changes in liquidity and leverage.

US equities had not experienced the same speculative excess as crypto markets and were therefore able to continue their rally. Bitcoin serves as a "high-beta barometer for global liquidity and fiat debasement," while US equities represent ownership of productive companies – currently dominated by the AI revolution.

Crypto Stocks Plummet

Stocks of crypto companies also suffered from market developments. By June 30, 2026, Coinbase (COIN), Circle (CRCL), and Bullish (BLSH) each recorded losses of at least 21 percent since the start of the year.

Bitcoin performed worse than US stocks, gold, and crude oil in the first half of 2026, making it the weakest of the major asset classes during this period.

Momentum Over Value: Investor Behavior Shifts

Jim Ferraioli of Charles Schwab explained at a panel in June 2026 that crypto investors are momentum chasers rather than value investors. Capital is flowing from fallen Bitcoin prices to faster-rising investments like AI stocks, gold, oil investments, and the SpaceX IPO (SPCX).

These structural differences between asset classes explain why they responded so differently to market conditions in 2026. While US equities benefited from concrete earnings growth in the AI sector, Bitcoin lacked this fundamental anchor in productive corporate profits.

Since July: Recovery of Nearly 50 Percent

The picture turned around in the second half of the year. On July 1, 2026, Bitcoin marked its year-to-date low of $57,800 and rose from there to $84,880 by October 1 – a gain of 46.9 percent, according to Binance Research. To reach its all-time high of $126,198, it still needs around one-third, and year-over-year it shows a decline of roughly 30 percent. Miner production costs have also increased: JPMorgan estimated them at $85,000 per coin in September. At the end of September, Bitcoin briefly exceeded this level for the first time in around 280 days, but subsequently fell back below it.

This article is a journalistic analysis and not investment advice.