Bitcoin extended its decline this week, falling below $75,000 after failing to break above $78,000 on Thursday, even as major U.S. equity benchmarks hit new highs. The move has widened the gap between the leading cryptocurrency and stock markets powered by a technology and artificial intelligence rally.
Over the past month, bitcoin has fallen more than 5%, while the S&P 500 closed at a record 5,321.41 and the tech-heavy Nasdaq Composite ended at 17,019.88, also a record. The Nasdaq 100 and small-cap Russell 2000 both touched all-time highs, signaling that broad equity risk appetite has not translated into renewed demand for digital assets.
Limited near-term upside amid weakening correlation
Bitcoin’s recent performance suggests limited potential to reclaim the $82,000 area in the short term. Its correlation with U.S. equities has weakened as technology shares, particularly those tied to artificial intelligence and advanced semiconductors, continue to surge.
Market data show that while traders remain active in equities tied to AI and high-performance computing, bitcoin has struggled to attract sustained buying at higher levels. The divergence underscores a rotation toward assets seen as having clearer earnings visibility and policy support.
Miners pivot from bitcoin toward artificial intelligence
Publicly listed bitcoin mining firms are increasingly reallocating capital toward AI-related infrastructure, signaling a strategic shift away from relying solely on digital asset prices.
TeraWulf announced plans for a 1-gigawatt high-performance computing expansion in Kentucky, positioning the company to capture demand from AI workloads. Core Scientific separately disclosed a $100 million agreement to deliver 200 megawatts of infrastructure to an AI company, expanding its business beyond traditional mining and hosting.
Several mining firms have also begun reducing their on-balance-sheet bitcoin reserves, adding incremental selling pressure to a market already struggling to regain momentum.
Trump Media bitcoin transfer fuels market unease
Sentiment took another hit after Trump Media & Technology Group moved 2,650 bitcoin, worth about $205 million at recent prices, to a wallet linked to a trading venue. Large transfers to trading platforms are often interpreted as potential precursors to sales, heightening short-term volatility concerns.
The company has previously accumulated more than 11,500 bitcoin at an average cost above $118,500, according to public disclosures. It has not provided further details on the latest transaction, leaving traders to speculate on whether the move signals planned liquidation, collateral management, or internal restructuring.
U.S. crypto legislation stalls in Congress
In Washington, a series of cryptocurrency bills remains stalled, extending regulatory uncertainty for the sector.
The proposed Digital Asset Parity Act, which would exempt mining and staking rewards from taxation until the assets are sold, has been introduced but has yet to receive a committee hearing or floor vote.
The Digital Asset Market Clarity Act, designed to delineate oversight responsibilities between the Commodity Futures Trading Commission and the Securities and Exchange Commission, also remains pending. The measure is intended to complement the GENIUS Act, an earlier bill focused on stablecoin regulation, but neither framework has advanced to the Senate floor.
The lack of progress prolongs a patchwork regulatory landscape and complicates planning for firms operating in the digital asset ecosystem.
Fed liquidity on hold as inflation risks rise
Monetary policy has offered little support to bitcoin and other speculative assets. Traders who had anticipated renewed liquidity from the Federal Reserve have instead seen the central bank’s balance sheet stabilize around $6.7 trillion since mid-April, ending several months of expansion.
Recent data showed the Consumer Price Index rising 3.4% year over year in April, while West Texas Intermediate crude futures traded above $80 per barrel, stoking concerns about persistent inflation. Higher energy costs risk feeding into broader price pressures, reinforcing the Fed’s cautious stance on additional stimulus.
With no fresh liquidity boost and inflation still above the Fed’s long-term target, the policy backdrop remains a headwind for assets that typically benefit from easier financial conditions.
AI-led equity rally contrasts with crypto stagnation
The sharp contrast between digital assets and technology shares has become more pronounced. Market enthusiasm has centered on companies tied to AI hardware and infrastructure, with SK Hynix and Micron each surpassing $1 trillion in market capitalization last week on rapid gains of more than 20% over seven days.
This enthusiasm has not spilled over into cryptocurrencies. Instead, the move by mining and infrastructure companies toward AI suggests a broader reallocation of capital to segments perceived to have stronger near-term growth prospects and clearer demand drivers.
The widening divergence between bitcoin and mainstream equity benchmarks indicates that overall market risk appetite remains selective, favoring technology and AI exposure over digital assets, at least for now.
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