Bitcoin (BTCUSD) Outpaces S&P 500 Returns Since Early September

Bitcoin (BTCUSD), though volatile, has outstripped the returns of the S&P 500 since the beginning of September.

Bitcoin (BTCUSD) has outperformed the S&P 500 since early September, despite the cryptocurrency and broader markets being impacted by macroeconomic concerns.

Bitcoin rose more than 14% during that period, while the S&P 508 gained about 3%. Both markets began the fall in the red after a jobs report raised concerns about the health of the U.S. economy.

Bitcoin was trading below $60,000 at the time, but signals from the Federal Reserve about a potential rate cut coming soon helped the cryptocurrency gain some momentum.

The Fed announced a jumbo 50-basis-point rate cut on Sept. 18 and set expectations for more to come, sending bitcoin higher. Lower rates translate into lower yields for Treasurys, and that makes riskier assets such as bitcoin more attractive to investors.

Still, any economic data that suggests the Fed could deviate from its rate-cutting cycle or that a recession is around the corner has the power to derail this bitcoin rally.

There may also have been some sudden shift out of crypto assets into Chinese equities after the government there announced a blockbuster stimulus package in late September, but that trade lost some steam as the optimism around more measures began fading.

Bitcoin traded around $68,000 Wednesday after three robust days of inflows for bitcoin exchange-traded funds (ETFs). According to data from Farside Investors, bitcoin ETFs have seen nearly $1.2 billion in net inflows since last Friday.

U.S. presidential elections have also played a role in bitcoin price movements this year.

"The macro factors contributing to crypto performance are currently rotating away from monetary policy concerns to US election outcomes," wrote researchers at Coinbase last week.

As part of a campaign agenda released Monday, Vice President and Democratic presidential nominee Kamala Harris mentioned "supporting a regulatory framework for cryptocurrency and other digital assets."

Though there were no other details, this was the first time the Harris campaign showed some support for the crypto industry, while her opponent former President Donald Trump has done so on many occasions.

"She knows crypto exists, it matters, and it isn't going away. But it's not the full-hearted embrace that crypto advocates have been hoping for," Matt Hougan, Chief Investment Officer for Bitwise, wrote in a commentary Tuesday, adding that "little sliver of good news was enough to send bitcoin up 5%. Enough to push more than $500 million into bitcoin ETFs."

Another recent boost for bitcoin prices came from failed cryptocurrency exchange Mt. Gox. In a recent notification, the exchange said that it will repay customers of a decade-old hack by October 2025 instead of the the end of this month. Many market watchers were concerned about bitcoin prices dropping fast with a huge amount of bitcoin hitting the markets as the repayments began in June.

"This could assuage near term concerns around supply," wrote Coinbase researchers, who also noted that prior movements in bitcoin wallets associated with Mt. Gox have led to sudden declines in bitcoin prices.

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