The US Federal Reserve announced its third interest rate cut of the year on Wednesday, lifting US equities while Bitcoin (BTC) slipped before bouncing back.
That dynamic has defined the second half of 2025. Even as capital flows into Bitcoin are increasingly tied to traditional equity investors, the cryptocurrency has continued to diverge from the stock market.
Over the past six months, Bitcoin has fallen almost 18%. Meanwhile, the three major US stock indexes posted strong and consistent gains, with the Nasdaq Composite up 21%, the S&P 500 rising 14.35% and the Dow Jones Industrial Average climbing 12.11%.
Bitcoin has still recorded notable milestones this year, including setting new all-time highs and avoiding the typical “red September” for the third year in a row.
Here’s how Bitcoin’s divergence from stocks has widened through the second half of the year.
July: GENIUS Act lifts crypto
July 2025 was defined by strong equity performance and a resilient risk appetite that persisted despite significant tariff announcements.
Early-July trade rhetoric caused brief turbulence, but markets quickly shifted their focus back to corporate earnings and underlying growth fundamentals.
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On July 9, AI chip giant Nvidia became the first company to reach a $4-trillion valuation. On the same day, equities shrugged off trade-related shocks as the S&P 500 and Nasdaq posted fresh record highs even after the US announced 50% tariffs on copper.
Bitcoin ended July up 8.13%, marking its strongest monthly performance in the second half of the year to date, including December. Crypto markets strengthened after US President Donald Trump signed the GENIUS Act into law, injecting fresh optimism into the sector, particularly for stablecoin-related businesses.
Corporate adoption also remained a key theme, with companies continuing to add Bitcoin to their balance sheets as part of digital asset treasury strategies. By July, interest in other major cryptocurrencies, including Ether (ETH) and Solana (SOL), also began to pick up.
August: Powell’s speech powers Ether’s ATH
August was driven by rising expectations that the Federal Reserve would soon cut interest rates. Those hopes fueled a broad rally across traditional markets, while crypto moved even faster. Bitcoin surged to a new all-time high of around $124,000 on Aug. 14 as the US dollar weakened amid rising trade tensions.
The Jackson Hole Economic Symposium then brought markets’ attention back to monetary policy. On Aug. 22, Fed Chair Jerome Powell delivered a dovish signal, suggesting that rate cuts were still possible later in the year, pushing Ether to a new all-time high.
Equities responded positively, but Bitcoin failed to sustain its momentum. The asset saw a sharp but brief uptick immediately after Powell’s speech before resuming its decline. By month’s end, Bitcoin’s post-ATH correction had clearly diverged from traditional markets. Bitcoin closed August down 6.49%.
September: First rate cut of 2025
September has historically been Bitcoin’s weakest month. Along with June, it is one of only two months that posts a negative average monthly return, earning it the nickname “red September.”
In 2025, however, Bitcoin defied that trend, recording its third consecutive positive September. The gain came as the Fed delivered its first rate cut of the year, a 25-basis-point reduction justified by signs of a cooling labor market. Bitcoin ended the month up 5.16%.
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Equities also responded positively, extending their third-quarter rally as markets priced in the likelihood of additional monetary easing in October.
Bitcoin, however, faced a new internal challenge. The community became divided over a major network upgrade that would remove limits on how much arbitrary data can be embedded on the blockchain.
Bitcoin Core, the software implementation most widely used by miners and node operators, supported lifting the limit. Those who view non-financial data on Bitcoin as spam pushed back against the change, contributing to increased adoption of Bitcoin Knots as an alternative implementation.
October: Trump threatens 100% tariffs on China
Bitcoin hit another all-time high on Oct. 6, but the month was ultimately defined by the largest liquidation event in Bitcoin’s history, with roughly $19 billion in positions wiped out.
Several factors were identified as contributors to the liquidation cascade that sent Bitcoin plunging below $110,000. These included a price glitch on Binance and the industry’s heavy reliance on futures-based trading, which amplified forced liquidations as prices fell.
The immediate catalyst, however, was a social media post by President Trump threatening 100% tariffs on Chinese imports. The comment triggered a sharp sell-off across both crypto and equity markets.
Although October is often referred to as Uptober in the crypto community due to its historically strong performance, 2025 proved to be an exception. Bitcoin snapped a five-year streak of positive Octobers and ended the month down 3.69% even as major stock indexes recovered from the trade-related shock.
By the end of the month, the Fed delivered its second consecutive rate cut, lowering the federal funds rate by another 25 basis points. Meanwhile, the US government remained shut throughout October, extending what became the longest government shutdown in history.
November: End of the US government shutdown
October may carry the nickname Uptober, but November has historically been Bitcoin’s strongest month, posting an average gain of 41.12% — more than double October’s average return of about 20%.
In 2025, November proved to be Bitcoin’s worst-performing month of the year, with the asset falling 17.67%. Selling pressure intensified throughout the month, pushing Bitcoin below the $100,000 mark by mid-November.
The divergence from equities was pronounced. Stock markets traded largely sideways as the US government shutdown came to an end. Investors remained cautious amid concerns over a potential AI-driven bubble. Some of those fears were eased later in the month after Nvidia reported record earnings for the third quarter, helping stabilize sentiment across technology stocks.
Bitcoin’s year-end target slashed
So far, Bitcoin is up about 2% in December, with major equity indexes also posting moderate gains. Bitcoin’s average December return currently stands at 4.54% at the time of writing.
While the holiday season has been relatively quiet for Bitcoin in recent years, history suggests the crypto market does not necessarily slow down during the festivities.
In December 2020, for example, Bitcoin surged nearly 47%, even as market-shaking news emerged from the US Securities and Exchange Commission: the launch of a years-long lawsuit against Ripple Labs and its executives.
This year, much of the optimism surrounding Bitcoin’s potential year-end rally has faded. Several market watchers have lowered their price targets for the cryptocurrency, including Standard Chartered.
The bank had previously forecast a year-end price of $200,000 for Bitcoin, but on Monday, it revised that target down to $100,000. Standard Chartered has also delayed its longer-term forecast for Bitcoin reaching $500,000, pushing the target from 2028 to 2030.
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