Bitcoin-to-S&P 500 Ratio Hits Record Peak | American Crypto Update
"](https://www.beincrypto.com/ Beth's Breakdown - Bitcoin's Historical Domination Against the S&P 500)[Welcome to my Daily Crypto Downtown, your one-stop rundown of the hottest crypto headlines for the day ahead]
First things first, let's grab a cuppa and dive into Bitcoin (BTC)'s performance in comparison to the S&P 500, a benchmark for the U.S. stock market's performance. With TradFi (traditional finance) creeping in, Bitcoin's prominence as a distinct asset class is increasing compared to traditional equities.
Crypto Highlights of the Day: BTC vs. S&P 500 Ratio Hits Record High
Matthew Sigel, head honcho of digital assets research at VanEck, shared the news of Bitcoin's historic outperformance against the S&P 500.
In particular, the BTC/S&P 500 ratio soared to an unprecedented high of $17.725 on May 8, signaling Bitcoin's growing dominance over traditional equities. Sigel penned, "All-Time High: Bitcoin/S&P 500 Ratio."
This achievement aligns with broader market trends, including Bitcoin's recent leap to briefly outclass Google on market cap metrics, as previously mentioned in a recent U.S. Crypto News article.
For Bitcoin, the surge is taking place amid growing institutional influence, which has seemingly triggered a liquidity influx, causing analysts to reconsider the BTC cycle theory.
"It feels like we can chuck that Bitcoin cycle theory out the window... It's more important to focus on how much new liquidity is flooding in from institutions and ETFs," CryptoQuant CEO Ki Young Ju opined.
With rising adoption and jitters in the traditional markets, investors are eyeing Bitcoin as a hedge against financial and U.S. Treasury risks.
$3.5 Trillion Flowing into U.S. Equity, Corporate Bond, and Treasury Funds
Reports reveal a cumulative inflow of $3.5 trillion into U.S. equity, corporate bond, and Treasury funds since 2007. Notably, $2.5 trillion of this surge happened post-2020.
The Kobeissi data suggest a robust investor appetite for U.S. assets. However, Bitcoin's ratio spike suggests a parallel shift, with some investors relying on decentralized assets amid global economic uncertainty, such as inflationary pressures and geopolitical tensions.
U.S. equity funds, amassing $1.2 trillion of the inflows, experienced a net outflow of $100 billion during the 2022 bear market.
According to Sigel, this indicates temporary risk aversion that Bitcoin seemed to avoid, as its long-term growth easily outstripped the Nasdaq across several timeframes.
"Bitcoin has outperformed the Nasdaq over 1 day, 1 week, 1 month, YTD, 1 year, 2 years, 3 years, 5 years, 10 years," Sigel stated.
Meanwhile, rising U.S. Treasury yields, hitting 4.641% in early January 2025, marked the highest since May 2024. This dampened equity fund inflows, possibly pushing investors toward Bitcoin as a hedge against traditional market turmoil.
Chart of the Day
At an all-time high, the BRR index/SPX ratio demonstrates the remarkable growth of Bitcoin compared to the S&P 500, showing investors' stronger faith in crypto over stocks.
Byte-Sized Alpha
Here's a gist of more U.S. crypto news to keep an eye on today:
- Raoul Pal predicts Bitcoin dominance has peaked, hinting at the arrival of the "Banana Zone"-a possible parabolic altcoin rally period.
- Strategy's Bitcoin holdings have raked in a 50.1% gain, propelled by recent acquisitions, such as purchasing 1,895 BTC for $180.3 million.
- Bitcoin soaring past $100,000 triggered the biggest wipeout since 2021, resulting in $970 million in liquidations.
- Pi Network ranks 6th among Finland's top social apps. A major Pi ecosystem event is set for May 14, and users are eagerly waiting for a potential Binance listing.
- XRP surged 8% following Ripple's settlement with the SEC, though rising profits for short-term holders may restrict its ability to breach the $2.38 resistance.
- MARA Holdings saw a 30% revenue growth year-over-year, CleanSpark's Q1 2025 revenue skyrocketed 62.5%, and Hut 8's revenue dropped by 58.1%.
- Cardano's price swelled 10%, and on-chain data showed that 74.14% of ADA's supply is profitable, signaling increased hoarding.
- Sei Labs proposes SIP-3 to transition the Sei network to an EVM-only model, removing CosmWasm and native Cosmos support.
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- In the world of cryptocurrencies, Bitcoin's market cap recently surpassed that of Google, showcasing its growing prominence.
- Matthew Sigel, head of digital assets research at VanEck, revealed Bitcoin's historic outperformance against the S&P 500, with the BTC/S&P 500 ratio reaching an all-time high of $17.725 on May 8.
- Sigel's statement aligns with broader market trends, suggesting that investors are increasingly turning towards decentralized assets like Bitcoin over traditional equities.
- Institutional influence and growing liquidity have been key factors driving Bitcoin's surge, causing analysts to reconsider the conventional BTC cycle theory.
- As traditional markets experience jitters, Bitcoin is being eyed as a potential hedge against financial and U.S. Treasury risks.
- Reports indicate a cumulative inflow of $3.5 trillion into U.S. equity, corporate bond, and Treasury funds since 2007, with $2.5 trillion of this surge happening post-2020.
- Despite the inflows into U.S. assets, Bitcoin's ratio spike suggests a parallel shift, with some investors opting for crypto due to global economic uncertainty.
- Raoul Pal, a well-known analyst, recently predicted that Bitcoin's dominance may have peaked, hinting at a possible rally for altcoins, or "Banana Zone."
- Crypto news also reveals that Bitcoin's surge past $100,000 last year triggered the biggest wipeout since 2021, resulting in $970 million in liquidations.
- In the crypto equities market, companies like eToro, YouHodler, Wirex, NEXO, and Arkham are key players that investors should keep an eye on. Analysts recommend consulting experts and verifying facts independently before making investment decisions.
