Stock Markets Tapping New Highs Last Week but BTC and ETH Suffer

The cryptocurrency industry is often described as a high-risk asset class that tends to perform poorly during times of economic uncertainty.

Although the stock market also falls into this category, at least to some extent, it has been on a wild run the past few weeks, with multiple new all-time highs among the most notable indicators. Meanwhile, cryptocurrencies have suffered and the largest digital assets have fallen since March.

The US stock market is on a roll

Perhaps due to the hype surrounding Nvidia, the US stock market has been on a massive rally since the beginning of the year. Take the largest and most prominent index – the S&P 500 – for example. It entered 2024 at less than 4,800 but rose to nearly 5,500 earlier this week to chart a new peak.

The Nasdaq Composite has been in even more impressive form, rising 19.8% year-to-date and hitting its own peak of nearly 18,000 this week.

However, the Dow Jones Industrial Average, which is neither tied to the hot tech sector nor top-performing Nvidia, performed poorly. Its annual gains are less than 4%, but it managed to hit a new all-time high earlier this year at around 40,000.

However, the situation with high-risk crypto assets like BTC and ETH is very different, at least in the last few weeks.

Despite the stock market reaching new highs, Bitcoin and Ethereum have fallen more than 10% from their annual peaks.

Other major cryptocurrencies such as $ sol, $adaAnd $link It has seen steeper declines, falling more than 25% from its recent highs. pic.twitter.com/NET1hMjr86

— IntoTheBlock (@intotheblock) June 21, 2024

What about Bitcoin/Ethereum?

Bitcoin has also had a very bullish year, driven by the approval of BTC ETFs in the US in January. Although the fourth halving also occurred earlier this year, an event typically seen as a catalyst for a rally, the asset has actually underperformed since its completion.

ETH has seen regulatory approval from the US Securities and Exchange Commission as well, with the agency giving the green light to Ethereum ETFs last month. However, it has not been launched yet and the ETH price has lost almost all of the gains that came after the positive news.

As such, both BTC and ETH have fallen about 10% since their annual peak and have decoupled from the US stock markets. However, it is worth noting that although it has declined in recent weeks, it is still more in the green than the indicators mentioned above.

Bitcoin is up 50% since the start of 2024, while Ethereum is up 54% over the same time frame.