Bitcoin Outperforms U.S. Stocks Amid Fed Rate Cut Hopes, Gains 18%

Crypto analyst Ash Crypto has highlighted a significant divergence between Bitcoin and the traditional U.S. stock market, suggesting that the world’s premier digital asset is poised for another explosive rally. According to Ash Crypto, Bitcoin is decoupling from U.S. equities, demonstrating resilience amidst broader market downturns. This pattern mirrors a bullish historical trend observed during the last U.S.-China trade war.

Over the past few weeks, the Magnificent Seven tech stocks (M7)—which include market heavyweights like Apple, Microsoft, and Nvidia—have experienced notable declines. These declines are driven by investor anxiety over persistent inflation, a delay in Federal Reserve rate cuts, and geopolitical tensions. Despite this financial turbulence, Bitcoin has outperformed expectations, bouncing 18% from its recent bottom. This performance underscores a growing narrative: Bitcoin is maturing into a macro asset that can hold its own even during traditional market stress.

Ash Crypto noted that this decoupling is not without precedent. In May 2019, when the U.S. ramped up tariffs on Chinese imports, the Nasdaq dropped approximately 12%. However, during that same period, Bitcoin skyrocketed by 70%, propelled by investor demand for alternative stores of value amid economic uncertainty. The correlation today is striking—and potentially consequential.

One of the key factors contributing to Bitcoin’s bullish trajectory is the anticipated pivot by the Federal Reserve. With inflation showing signs of cooling and economic indicators suggesting a slowdown, markets are increasingly pricing in the likelihood of rate cuts later this year. The return of quantitative easing (QE), or at the very least a pause in tightening, would provide significant liquidity to the financial system, historically a favorable condition for risk assets like Bitcoin.

Ash Crypto argues that, just like in 2019, upcoming Fed policy shifts will provide the fuel needed for another major bull run. “Apart from day volatility,” he wrote, “Bitcoin is very bullish for the next year. Upcoming Fed rate cuts and QE will help Bitcoin to pump hard like 2019.”

The narrative of Bitcoin as a hedge against macroeconomic instability is gaining strength, especially as traditional correlations begin to break down. While U.S. stocks may continue to face pressure from high interest rates, inflation uncertainty, and geopolitical risks, Bitcoin’s decentralized nature and fixed supply offer an appealing alternative for investors seeking shelter and opportunity.

With institutional interest in crypto markets on the rise and the global economic environment increasingly unstable, Bitcoin is once again positioning itself as an asset to watch. If history is indeed repeating, as Ash Crypto suggests, the market may be on the cusp of another dramatic leg up.