Wall Street is on a bull run – nothing compared to Bitcoin.

As the S&P 500 hit an all-time high on Friday, the bull market in U.S. stocks is poised to celebrate its two-year anniversary. Although enthusiasm has been subdued in the crypto market for months, the window shines a light on how much Bitcoin has gained in that time.

As stated in Opening the bell every dayFinancial Times, the S&P 500 rose more than 60% to 5,800 points. During the same period, however, the price of Bitcoin increased by around 220%, from approximately $20,000 to its current price of over $63,000.

The tech-heavy Nasdaq Composite rose 78%, from 10,300 points to 18,350 points, while the Dow Jones Industrial Average rose 43%, from 29,300 points to around 42,800 points. The Wall Street bull can't compete with Bitcoin in the last couple of years.

Bitcoin has been struggling to regain new highs for months, but analysts say there are a number of factors that have led the asset to follow a similar pattern to the main stock index, from macroeconomic conditions to products that allow traditional investors to gain exposure to Bitcoin without the hassle of buying. And holding cryptocurrency.

Bitcoin has fallen to around $14,750 in November 2022, amid growing panic around the collapse of popular crypto exchange FTX. Meanwhile, the S&P 500 is down 3,600 points from a month ago, as the Federal Reserve raised interest rates at a breakneck pace, fueling fears of high unemployment.

When Bitcoin soared to $73,000 in March, the S&P 500 was also in record territory. While the index hit new all-time highs, Bitcoin has since fallen as low as $54,000. As of press time, the property remains 14% below its peak value, trading at $63,250.

Still, some analysts believe that Bitcoin's price may rise by the end of the year. Ryan Lee, chief analyst at Bitget Research, said on Friday. Decrypt Based on expectations related to the US presidential election, the price of Bitcoin may reach $50,000 to $80,000.

The relative return between Bitcoin and the S&P 500 over the past two years is partly the result of the Fed's increased balance sheet since 2008, said Greg Magadini, director of distribution at Amberdata. Decrypt. Representing what the Fed has and what it should be, both asset classes have benefited from the increase in liquidity that this figure has. It added $7 trillion.he said.

“Even if rates are a little bit higher, we could lose what happened after the Great Financial Crisis,” he said, adding that the Fed's balance sheet has grown more than $800 billion.

Brian Ruddick, head of research at market maker GSR, said Decrypt Bitcoin and the S&P 500's bull run since late 2022 is partly a coincidence.

Both asset classes are affected by macroeconomic factors such as the Federal Reserve's monetary policy, he said. But he explained that the rise in the value of equity and bitcoin “are not caused by the same thing.”

“For the S&P, US corporate private profits were rising sharply during this period. [alongside] Expectations of future profits,” he said. “For Bitcoin, you have this very, very positive idiosyncratic phenomenon, which was the launch of Bitcoin ETFs.”

Since its launch in January, spot Bitcoin ETFs have raised $18.6 billion, according to CoinGlass. Data. “It's very difficult to estimate how much of an impact this has had,” Ruddick said, as investors opened up a major avenue for speculation on Bitcoin's value.

Ruddick notes that Bitcoin's correlation to stocks has historically been low, but greater participation from institutional investors has changed that dynamic for the foreseeable future.

“This bond is increasing,” he said. As crypto becomes more institutionalized, it will behave more like other asset classes.

Edited by Andrew Hayward.