As the S&P 500 rose to a record high Friday, a bull market in U.S. equities was set to mark its two-year anniversary. Though enthusiasm has been muddled in the crypto market for months, the window also shines a light on just how much Bitcoin has gained during that span.

As highlighted in Opening Bell Daily, a financial newsletter, the S&P 500 has climbed more than 60% to around 5,800 points since a bear market in equities petered out two years ago. Over the same period of time, however, Bitcoin’s price has risen around 220%, up from approximately $20,000 to a current price above $63,000.

The tech-heavy Nasdaq composite has climbed 78% in the same span, rising from around 10,300 points to 18,350 points, while the Dow Jones Industrial average has meanwhile climbed 43%, rising from 29,300 points to around 42,800 points. Wall Street's bull run over the last two years simply can't compete with Bitcoin.

Bitcoin has struggled to reclaim a new peak price for months, but analysts said there were several reasons why the asset has drawn a similar pattern to the major stock index, ranging from macroeconomic factors to products letting traditional investors gain Bitcoin exposure without the hassle of buying and holding cryptocurrency.

Bitcoin bottomed out at around $14,750 in November 2022, sinking as panic spread surrounding the collapse of prominent crypto exchange FTX. Meanwhile, the S&P 500 fell to 3,600 points a month before, as the Federal Reserve raised interest rates at a break-neck pace, prompting fears of high unemployment.

When Bitcoin swelled to $73,000 in March, the S&P 500 was also in record territory. While the index has gone on to notch new all-time highs, Bitcoin has since fallen as low as $54,000. As of this writing, the asset’s price remains 14% below its peak price, trading hands at $63,250.

Still, some analysts believe Bitcoin’s price could pop by the end of the year. On Friday, Bitget Research’s Chief Analyst Ryan Lee told Decrypt that Bitcoin’s price could range between $50,000 and $80,000 based on expectations related to the U.S. presidential election.

Comparable returns between Bitcoin and the S&P 500 over the past two years are partly a product of the Fed’s increased balance sheet since 2008, Amberdata Director of Derivatives Greg Magadini told Decrypt. Representing what the Fed owns and owes, both asset classes have benefited from increased liquidity as that figure has topped $7 trillion, he said.

“Although rates are a bit higher, we can lose sight of what’s happened since the Great Financial Crisis,” he added, pointing to substantial increase in the Fed’s balance sheet from $800 billion.

Brian Rudick, head of research at the market maker GSR, told Decrypt that Bitcoin and the S&P 500’s overlapping bull runs since late 2022 are partly a coincidence. 

Both asset classes have been impacted by macroeconomic factors, such as the Federal Reserve’s monetary policy, he said. But the increase in equities and Bitcoin’s price haven’t “been exactly caused by the same thing,” he explained.

“For the S&P, you had U.S. corporate private profits rising considerably over this time [alongside] expectations of future profits,” he said. “For Bitcoin, you have this one very, very positive idiosyncratic event, which was the launch of the spot Bitcoin ETFs.”

Since launching in January, spot Bitcoin ETFs have pulled in $18.6 billion, according to CoinGlass data. Opening up a major avenue for investors to speculate on Bitcoin’s price, Rudick said, “It's really hard to underestimate just how impactful this has been.”

Rudick noted that Bitcoin’s correlation with equities has been historically low, but greater participation from institutional investors has altered that dynamic for the foreseeable future.

“This correlation has been rising,” he said. “As crypto becomes more and more institutionalized, it will behave much more like other asset classes.”

Edited by Andrew Hayward