The Federal Reserve announced its third rate of interest cut of the yr on Wednesday, boosting U.S. stocks while Bitcoin (BTC) fell before recovering.
This dynamic has determined the second half of 2025. Even as capital inflows into Bitcoin are increasingly tied to traditional stock investors, the cryptocurrency continues to diverge from the stock market.
Over the past six months, Bitcoin has fallen by almost 18%. Meanwhile, the three major US stock indices posted strong and consistent gains: the Nasdaq Composite rose 21%, the S&P 500 rose 14.35% and the Dow Jones Industrial Average rose 12.11%.
Bitcoin has still recorded notable milestones this yr, including reaching recent all-time highs and avoiding the everyday “Red September” for the third yr in a row.
Here's how the divergence between Bitcoin and stocks widened within the second half of the yr.
Bitcoin moved in parallel with the three major stock indices within the third quarter but began to decouple within the fourth quarter.
July: GENIUS Act repeals crypto
July 2025 was characterised by strong equity performance and robust risk appetite, which continued despite significant tariff announcements.
Trading rhetoric in early July caused temporary turbulence, but markets quickly shifted their focus back to corporate earnings and underlying growth fundamentals.
On July 9, AI chip giant Nvidia became the primary company to achieve a $4 trillion valuation. On the identical day, stocks resisted trade shocks because the S&P 500 and Nasdaq hit recent record highs even after the US announced 50% tariffs on copper.
Bitcoin ended July up 8.13%, marking its strongest monthly performance to this point within the second half of the yr, including December. Crypto markets strengthened after US President Donald Trump signed the GENIUS Act into law, bringing recent optimism to the sector, especially amongst stablecoin-related firms.
Corporate adoption also remained a key theme as firms proceed so as to add Bitcoin to their balance sheets as a part of their digital asset treasury strategies. In July, interest in other major cryptocurrencies including Ether (ETH) and Solana (SOL) also began to extend.
August: Powell’s speech pushes Ether’s ATH
August was marked by rising expectations that the Federal Reserve would soon cut rates of interest. These hopes sparked a broad rally in traditional markets while the cryptocurrency moved even faster. Bitcoin rose to a brand new all-time high of around $124,000 on August 14 because the US dollar weakened amid rising trade tensions.
The Jackson Hole Economic Symposium then turned markets' attention back to monetary policy. On August 22, Fed Chairman Jerome Powell issued a dovish signal, suggesting rate of interest cuts were still possible later within the yr, pushing Ether to a brand new all-time high.
Stocks responded positively, but Bitcoin failed to take care of its momentum. The asset experienced a powerful but temporary rise immediately after Powell's speech before continuing its decline. By the tip of the month, Bitcoin’s post-ATH correction diverged significantly from traditional markets. Bitcoin ended August down 6.49%.
September: First rate of interest cut in 2025
September was historically Bitcoin’s weakest month. Along with June, it’s one in all only two months to record a negative average monthly return, earning it the nickname “Red September.”
However, in 2025, Bitcoin bucked this trend and posted a positive result for the third consecutive day in September. The increase got here because the Fed made its first rate of interest cut of the yr, a 25 basis point cut that was justified by signs of a slowdown within the labor market. Bitcoin ended the month up 5.16%.
Stocks also responded positively and continued their rally within the third quarter as markets priced within the likelihood of further monetary easing in October.
However, Bitcoin faced a brand new internal challenge. The community was divided over a significant network upgrade that will remove restrictions on embedding any data on the blockchain.
Bitcoin Core, probably the most commonly used software implementation by miners and node operators, supported lifting the limit. Those who view non-financial data about Bitcoin as spam rejected the change, contributing to the increasing adoption of Bitcoin Knots as a substitute implementation.
October: Trump threatens China with 100% tariffs
Bitcoin hit one other all-time high on October 6, however the month ultimately saw the most important liquidation in Bitcoin history, wiping out positions price around $19 billion.
Several aspects have been identified that contributed to the liquidation cascade that sent Bitcoin below $110,000. These included a drop in Binance prices and the industry's heavy reliance on futures trading, which led to forced liquidations as prices fell.
However, the immediate trigger was a social media post from President Trump by which he threatened 100% tariffs on Chinese imports. The comment sparked a pointy selloff in each crypto and stock markets.
Although October is also known as Uptober within the crypto community because of its historically strong performance, 2025 proved to be an exception. Bitcoin broke a five-year winning streak in October, ending the month down 3.69%, at the same time as major stock indexes recovered from the trade-related shock.
Trump's social media post sparks a crypto liquidation frenzy. Source: Donald Trump
By the tip of the month, the Fed made its second consecutive rate cut, cutting the important thing rate of interest by one other 25 basis points. Meanwhile, the U.S. government remained closed throughout October, extending the longest government shutdown in history.
November: End of US government shutdown
October could also be nicknamed Uptober, but November was historically Bitcoin's strongest month, posting a mean gain of 41.12% – greater than double the typical return of around 20% in October.
In 2025, November proved to be Bitcoin's worst performing month of the yr, with a decline of 17.67%. Selling pressure intensified throughout the month, pushing Bitcoin below $100,000 by mid-November.
November is historically Bitcoin's best month, but it surely was the worst month of 2025. Source: CoinGlass
The deviation from stocks was clear. Stock markets were largely flat as the federal government shutdown within the US got here to an end. Investors remained cautious amid concerns a couple of possible AI-driven bubble. Some of those fears were allayed later within the month after Nvidia reported record third-quarter profits, helping to stabilize sentiment in technology stocks.
Bitcoin’s year-end goal has been drastically reduced
So far in December, Bitcoin is up about 2%, with major stock indices also posting modest gains. Bitcoin’s December average return is currently 4.54% on the time of writing.
While the vacation season has been relatively quiet for Bitcoin lately, history suggests that the crypto market doesn't necessarily decelerate in the course of the holidays.
In December 2020, for instance, Bitcoin rose nearly 47% at the same time as the U.S. Securities and Exchange Commission (SEC) announced market-shattering news: the initiation of a years-long lawsuit against Ripple Labs and its executives.
This yr, 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 concentrate on to $100,000. Standard Chartered has also postponed its longer-term forecast that Bitcoin will reach $500,000, moving the goal from 2028 to 2030.
