Bitcoin is holding up better than it probably should.
The largest cryptocurrency was trading at $67,378 on Monday morning, up 1.1% over the past 24 hours and essentially flat for the week as the world around it deteriorated sharply.
Among the majors, ether rose 2.3% to $1,981, hovering just below $2,000. BNB gained 1.4% to $624. Dogecoin added 1.8% to $0.09. Solana climbed 1.8% to $83.69 but remains down 1.5% for the week, remaining the lowest seven-day major. XRP remained stable at $1.35, down 1% for the week.
S&P 500 futures fell more than 2% in Asian trading. The VIX reached its highest level since the April tariff crisis. Oil is above $100. The dollar has just recorded its biggest weekly increase in a year.
Meanwhile, veteran strategist Ed Yardeni increased the probability of a US market collapse to 35%, from 20%, while reducing the chances of a collapse to just 5%.
“The U.S. economy and stock market are stuck between Iran and a hard place,” Yardeni wrote. “If the oil shock persists, the Fed’s dual mandate will be caught between the growing risk of higher inflation and rising unemployment.”
Under crisis conditions, risk assets across the board tend to suffer, as investors withdraw capital from anything volatile and turn to cash, Treasuries, or the dollar. Historically, Bitcoin has not been immune to this dynamic, falling alongside stocks during every major episode of risk aversion since 2020, despite its reputation as a hedge.
Elsewhere, Greg Cipolaro, head of research at NYDIG, proposed a framework for understanding Bitcoin’s price action relative to U.S. stocks in a note on Friday.
Cipolaro argued that bitcoin’s recent parallel move with U.S. software stocks reflects “shared exposure to the current macroeconomic regime” rather than structural convergence.
Statistically, only about 25% of Bitcoin’s price movements can be explained by correlation with stocks. The remaining 75% is determined by factors outside of traditional stock indexes, he said.
The overall picture for stocks remains bleak. MSCI’s global stock gauge fell 3.7% last week, with Asia worst hit. South Korea has still not fully recovered from its record two-day fall. Hedge funds added to short positions in US stock ETFs. Benchmark 10-year Treasury yields jumped six basis points as traders anticipated higher inflation from the oil shock.
The United States is faring better than most other countries on the stock front, with the S&P 500 index down just 2% last week, in part because American energy self-sufficiency insulates it more than Asian or European markets.
But the 2% drop in futures on Monday suggests the margin of safety is shrinking.
