Bitcoin Enters a Bear Market — What It Means for Stocks
S&P 500 performance after Bitcoin falls 20% from its 52-week high
A 20% decline from a 52-week high is the conventional definition of a bear market, and Bitcoin reaches that threshold far more often than equities do. Bitcoin's relationship with the stock market has shifted over time — sometimes trading as an isolated asset, sometimes moving with the riskiest corners of the equity market. This chart tracks how the S&P 500 has actually performed in the periods following each Bitcoin bear-market signal, so the relationship can be judged from evidence rather than headlines.
| Date | 1M return | 1Y return | 5Y return |
|---|---|---|---|
| 2014-10-23 | +5.8% | +6.4% | +54.9% |
| 2015-11-11 | -3.0% | +4.5% | +70.5% |
| 2016-06-22 | +4.3% | +16.7% | +104.6% |
| 2017-01-06 | +0.7% | +20.7% | +105.4% |
| 2017-07-11 | +2.0% | +14.4% | +56.7% |
| 2018-01-08 | -2.4% | -5.9% | +42.6% |
| 2019-07-15 | -2.9% | +6.1% | +85.4% |
| 2021-01-21 | +0.6% | +16.3% | +81.1% |
| 2021-09-07 | -3.5% | -11.9% | — |
| 2023-09-11 | -2.9% | +23.8% | — |
| 2024-05-01 | +5.2% | +12.6% | — |
| 2025-02-26 | -4.4% | +15.5% |
What history says
Editorial commentary written by ALAN analysts. Figures cited below are analyst-authored context — they are not derived from the chart above and may reflect different windows or sources.
Because Bitcoin is far more volatile than equities, a 20% decline is a recurring feature of the asset rather than a rare crisis. Treating each one as a stock-market omen overstates its signal value.
In periods when Bitcoin trades alongside speculative growth stocks, its drawdowns can coincide with equity risk-off episodes. In periods when it trades on crypto-specific news, the spillover to the S&P 500 has been limited. The chart shows both kinds of episodes.
Investors sometimes hold crypto expecting it to zig when equities zag. Reviewing how stocks behaved during past Bitcoin bears is a direct test of whether that expectation has held.
If a portfolio holds crypto as a diversifier, use each Bitcoin bear-market signal as a prompt to re-examine its recent correlation with the equity sleeve and confirm the position still plays the role it was sized for. Consider capping crypto exposure at a fixed percentage and rebalancing back to that cap whenever volatility pushes it meaningfully off target.