Influential cryptocurrency analysts shared their take on Thursday on why stocks are reaching new all-time highs while Bitcoin (CRYPTO: BTC) and the broader cryptocurrency market continue to lag.
The AI-Trade Factor
Widely followed X user The ₿itcoin Therapist shared an image, contrasting the S&P 500 hitting new all-time highs, currently at 7,501, with Bitcoin, which is still down 36% from its October highs.
Willy Woo, a vocal Bitcoin advocate and commentator, framed the market divergence as capital reallocating toward AI.
“Stock indices up-only is tracking money entering big league AI. Take a look at SaaS; they also took a dive. Capital is reallocating into the next big thing,” Woo said.
They may well be right.
This surge is heavily concentrated, with AI-linked stocks and “Magnificent Seven” giants dominating index performance and accounting for a massive share of total S&P 500 market capitalization
Investors view AI-focused companies as the clearest long-term growth opportunity, and that conviction has been strong enough to outweigh typical equity headwinds
Dimmed Rate Cut Hopes Impacting Bitcoin More?
Cryptocurrency analyst Benjamin Cowen had a different explanation. They attributed Bitcoin’s lag to its higher position on the “risk curve” and stronger dependence on loose monetary policy.
“Rising inflation has priced out rate cuts for the next couple of years, which more immediately affects BTC,” Cowen said.
Indeed, the probability of a rate cut doesn’t exceed 50% until December 2027, according to the CME FedWatch tool.
The Correlation Argument
Popular cryptocurrency podcaster Scott Melker stated that BTC and equities are and have always been uncorrelated assets.
While the two assets diverged notably in February and March, TradingView indicates their correlation reached 0.90 in April and presently stands at 0.78.
Price Action: At the time of writing, BTC was exchanging hands at $80,611.43, up 1,04% in the last 24 hours, according to data from Benzinga Pro.
The S&P 500 spiked 0.77% to close at 7,501.24 on Thursday, while the tech-heavy Nasdaq Composite ended up 0.88 at 26,635.22, both notching new closing records.
Photo courtesy: Shutterstock
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