Crypto Bulls Frustrated as Bitcoin and Stocks Recouple – to the Downside
A continuing series of record highs for the S&P 500 and Nasdaq over the past weeks has done nothing to prop up sliding crypto prices, but Thursday saw both asset classes tumbling together.
While bitcoin has struggled mightily over the past months, with its price falling more than 20% since hitting a record high in mid-March, U.S. stocks – as represented by the Nasdaq Composite and the S&P 500 – have seemingly been on a one-way path higher.
Both of those equity averages closed in the green for the seventh consecutive day on Wednesday, with both hitting all-time highs. For the S&P 500, it was its 37th record close of 2024 and for the Nasdaq, its 27th, according to MarketWatch.
A report yesterday in The Block noted that bitcoin's correlations with those gauges had fallen to multi-month lows – to minus 0.84 with the Nasdaq and minus 0.82 with the S&P 500. (A reading of minus 1 would mean they're moving essentially the same amount but in opposite directions.)
Read more: Here's Why Bitcoin's Not Keeping Pace With Nasdaq
That's not the case today. They're all moving in lockstep. But unfortunately for the bulls, it's as stocks have turned sharply lower. At midday New York time, the Nasdaq is lower by 1.8% and the S&P 500 by 0.9%. Bitcoin, which earlier in the session climbed above $59,000 on welcome U.S. inflation news, is now lower by 0.6% to $57,500. The broader CoinDesk 20 Index is down 0.4%.
There could be further downside for cryptocurrencies if the equity market's bad day turns into a broader correction, Joel Kruger, market strategist at the LMAX Group, said in a morning update.
"Right now, the biggest risk we see to crypto assets is the risk that highly overbought U.S. equities could be on the verge of rolling over," Kruger said. "The correlation isn’t absolute by any means, but there is evidence that would suggest a sharp pullback in stocks could weigh on crypto, at least for a moment."
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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- Ethena's USDe becomes fifth stablecoin to surpass $10 billion market cap in just 609 days, while Tether's dominance continues to slip.
