Bitcoin News Today: S&P 500 Hits $6,900 High as Crypto Stagnates Below $3 Trillion

The S&P 500 surged to record highs in 2025, reaching a level of $6,900 amid consistent gains since the second quarter. Meanwhile, the crypto market cap lingered just below $3 trillion, unable to break through key resistance levels. This divergence between traditional equities and digital assets underscored shifting investor sentiment and liquidity dynamics in global markets.

Investor confidence in traditional markets remained strong, supported by resilient corporate earnings and stable macroeconomic policies. The RSI for the S&P 500 stood at a healthy 59, indicating balanced momentum and no signs of overheating.

In contrast, the crypto sector faced challenges. Liquidity conditions deteriorated, leading to fragile price structures and repeated failures to reclaim the $3 trillion market cap. Analytics platforms noted institutional outflows from spot ETFs, compounding the issue.

Why the Standoff Happened

The divergence between the S&P 500 and the crypto market in 2025 reflected deeper structural imbalances. Traditional equities benefited from a strong earnings environment, with year-over-year growth in the fourth quarter exceeding 10%. In contrast, digital assets struggled with weak institutional participation and regulatory uncertainty, limiting their ability to attract large-scale capital flows.

Crypto's RSI reading of 43 signaled cooling momentum, indicating that the market lacked sufficient demand to sustain a breakout. TradingView data showed that institutional investors were increasingly cautious, reducing exposure through ETF outflows. This contrasted with the S&P 500, which saw steady buy-side volume reinforcing its upward trajectory.

The shift in capital allocation reflected a broader risk appetite in equities versus caution in crypto. Unlike the synchronized movements of 2023–2024, when both asset classes expanded liquidity, 2025 saw a clear split. Analysts from firms like Glassnode observed that without a reversal in ETF flows, the gap might persist, affecting overall market sentiment.

How Markets Reacted

The S&P 500's rally drew capital away from crypto, reinforcing the trend of investor preference for traditional assets. Coinbase, a notable crypto firm, made headlines by joining the S&P 500 index in May 2025, marking a milestone for the crypto industry. However, despite a peak near $445 per share in July, its stock had pulled back to around $240–$270 by December. While not surpassing Charles Schwab in market cap, Coinbase's inclusion signaled growing acceptance of crypto-native companies in mainstream finance.

Bitcoin mining firms also saw varied performance. IREN, Cipher Mining, and Hut 8 delivered strong gains, with IREN up over 300% year-to-date. These gains were driven by strategic diversification into AI infrastructure and long-term data center leases. Conversely, pure-play miners like Marathon Digital and Bitdeer underperformed. Marathon fell over 44% YTD, while Bitdeer saw a decline of around 50% after reporting larger-than-expected losses.

Circle Internet reported strong financial results, with Q3 2025 revenue reaching $740 million and adjusted EBITDA at $166 million. Despite these numbers, shares fell 13.03% over the past week, as investors expressed concerns about future guidance and market conditions. The company's USDC stablecoin grew 108% YoY to $73.7 billion in circulation.

What Analysts Are Watching

Experts are closely monitoring for signs that the S&P 500 and crypto markets might converge again. A reversal in ETF flows or macroeconomic improvements could signal renewed interest in digital assets. The broader implications of the current divergence include potential shifts in investor behavior as they weigh the stability of equities against the volatility of crypto.

Policy developments are also a key focus. In late 2025, the U.S. passed the first major piece of crypto legislation, marking a turning point for the industry. Regulators scaled back enforcement actions while advancing rulemaking aimed at supporting the sector. This shift in approach could create a more favorable environment for crypto adoption.

For investors, the path forward remains uncertain. The S&P 500's momentum appears firmly intact, with earnings growth and macroeconomic stability supporting its upward trend. Meanwhile, crypto remains in a consolidation phase. Companies that adapt to AI and blockchain innovation, like Coinbase and IREN, could position themselves for a stronger performance in 2026.

What This Means for Investors

Investors must remain vigilant as market dynamics continue to evolve. The S&P 500's strength signals a risk-on environment in traditional markets, which may divert capital from crypto until liquidity improves. For those with exposure to crypto, monitoring ETF flows and regulatory developments will be essential.

Bitcoin mining firms, in particular, must navigate a volatile landscape. Those pivoting to AI infrastructure, like IREN and Hut 8, appear to be better positioned to capture market opportunities. Conversely, companies that remain purely focused on Bitcoin mining, such as Marathon and Bitdeer, face execution and regulatory risks.

As the year ends, the crypto sector remains at a crossroads. The divergence with the S&P 500 highlights both the challenges and the potential for innovation in digital assets. For now, the path to convergence is unclear, but investors who stay informed and agile may find opportunities in an evolving market.