Bitcoin’s fall in the first quarter ended an unusual trend: nearly six months of underperformance against U.S. stocks, an unprecedented streak.
“This has never happened,” said Mark Connors, founder of Risk Dimensions, pointing to data showing bitcoin has consistently lagged stocks since early October. This trend has raised new questions about whether the asset behaves more like a risky trade than a hedge.
Bitcoin fell about 22% in the first quarter of 2026, following a 25% decline in the last three months of 2025. Over a similar period, the S&P 500 fell much less, leaving a wide performance gap. Connors said the length of this gap, not just its size, stands out. Previous declines have been more marked but shorter.
This weakness came against a backdrop of broader difficulties in the market. US stocks posted their worst quarter in four years, with the Nasdaq falling more than 10% from its recent highs. The combined decline in stocks and cryptocurrencies has erased much of the rally that followed the 2024 election.
Political progress has been uneven. A new SEC chairman has helped pave the way for more crypto ETFs, and lawmakers have advanced measures such as the GENIUS Act. Trump also signed an executive order in August that would make it easier for 401(k) plans to include alternative assets such as cryptocurrencies, private equity and real estate, to which the Labor Department proposed a rule in response Monday.
Mars shows signs of stability
Despite a weak quarter, Bitcoin held up better in March than expected.
Escalating tensions between the United States and Iran in early March sent shockwaves through global markets, sending oil prices and the U.S. dollar higher as investors reacted to supply risks and rising costs.
Volatility has triggered sharp moves across asset classes. Gold, often considered a safe haven, has seen extreme fluctuations as margin calls and urgent liquidity needs force institutional investors and sovereign entities to sell. The scale of this change is among the most serious short-term upheavals in decades.
However, Bitcoin has not experienced the same level of forced unwinding. The crypto rose about 1% in March, while gold fell 11% over the same period. “It was really hanging there,” Connors said.
He attributes this stability in part to earlier selloffs that eliminated leveraged positions. Bitcoin’s ability to quickly cross borders may also limit forced sales compared to physical assets.
Perspectives: a “coil spring”?
Looking ahead, Connors pointed to Bitcoin’s prolonged underperformance relative to stocks as a factor that could shape what comes next. Rolling 63-day data shows the asset has lagged the S&P 500 since October – the longest such period on record – an imbalance that has historically preceded reversals.
If this trend continues, Bitcoin could enter a phase where relative weakness gives way to renewed demand, especially as macroeconomic pressures from debt and monetary expansion continue to build in the background.
The timing, however, may depend less on market structure and more on geopolitics. The trajectory of the Iranian conflict and its impact on energy markets, liquidity and global risk appetite could determine how quickly sentiment changes.
“It’s either two months or two years,” Connors said.
