S&P 500 Hits Record High Bitcoin Waits on Yields and Dollar
The S&P 500 reached a new all-time high of 7,840 on October 6, driven by a retreat in oil prices, easing Treasury yields, and optimism around artificial intelligence-linked companies. The 10-year Treasury yield slipped to 5.28%, while a softer dollar boosted sentiment across dollar-denominated markets. However, Bitcoin remained unchanged, highlighting that equity milestones do not always translate into crypto gains.
Historical data shows that Bitcoin’s performance after S&P 500 records varies widely. In February 2020, Bitcoin dropped sharply after a record high due to the COVID-19 shock. Conversely, in August 2020, Bitcoin benefited from low rates, liquidity, and a weaker dollar. In January 2022, rising yields and tighter policy led to a broader decline in Bitcoin. More recently, Bitcoin reached a new high in March 2024, driven by crypto-specific factors like spot Bitcoin ETFs.
The current market backdrop remains uncertain. While lower yields and a weaker dollar provided some relief, the 10-year yield remains above 5%, and the dollar’s decline may be short-lived. Bitcoin’s steady spot buying suggests internal market strength, but broader financial conditions will ultimately determine its path. The upcoming U.S. midterm elections and the Federal Reserve’s October 28 rate decision add further complexity.
Analysts at XWIN Japan caution that past Bitcoin gains around midterm elections do not guarantee future rallies. They emphasize watching post-election trends in yields, buying activity, and regulatory clarity. Bitcoin is currently trading around $86,000, up 3% over seven days but down 31% from a year ago. The third quarter saw a 43% rise for Bitcoin, driven by bond market shifts and positive spot ETF flows.