Economy: Over $2 Trillion for Wall Street in a Month, Almost Nothing for Bitcoin

Two rooms, two atmospheres. Nearly $2.1 trillion in additional valuation for the S&P 500 since the beginning of the month, approximately the size of the cryptocurrency market! Yet, Bitcoin has only increased by 2% and remains stuck around $64,600. This discrepancy can be explained by a stock market rally focused on artificial intelligence, but also by several specific constraints in the crypto market. Here’s the overview.

Key Points {#h-key-points}

• The S&P 500 gained 3.12% over the month and reached a record capitalization close to $70.5 trillion.
• Bitcoin increased by about 2%, but remains trapped between $63,000 and $66,000.
• AI-related stocks are capturing most of the demand in the U.S. markets.
• Bitcoin ETFs attracted about $626 million this week, without triggering a bullish breakout.

Wall Street is rising, but the rally remains concentrated {#h-wall-street-is-rising-but-the-rally-remains-concentrated}

The rise of the S&P 500 does not necessarily correspond to a general movement towards risky assets. The index primarily benefits from large-cap tech stocks, semiconductor manufacturers, and companies directly exposed to spending on artificial intelligence.

This concentration limits the effects on Bitcoin. Investors are currently favoring companies capable of converting AI spending into revenue, profits, or growth prospects. BTC does not have direct exposure to this dynamic and relies more on the overall available liquidity.

The easing of oil prices also favors stocks. Cheaper energy quickly reduces transportation, logistics, and industrial costs. For Bitcoin, the transmission remains more indirect: the drop in oil must first moderate inflation expectations, then influence Federal Reserve policy. However, markets are still considering the possibility of a new monetary tightening in September.

Moreover, the $2.1 trillion gained by the S&P 500 represents a capitalization increase, not as much actual money injected. The comparison mainly illustrates the scale difference between the two markets.

Bitcoin still lacks new buyers {#h-bitcoin-still-lacks-new-buyers}

Several sector-specific factors are also hindering BTC. The issue related to Coldcard wallets has degraded sentiment, while uncertainties surrounding the CLARITY Act keep some institutional investors on the sidelines.

Strategy is now also contributing to the available supply. The company sold bitcoins for three consecutive months, including 1,638 BTC between July 27 and August 2. It still holds 842,138 BTC, acquired at an average price of $75,419.

The recent decline in the supply of major stablecoins constitutes another signal of caution. USDT, close to $190 billion in the spring, is now around $184 billion. The high real yields on Treasury bonds offer a paid waiting solution, at the expense of available capital for crypto.

Bitcoin spot ETFs, however, recorded about $626 million in inflows this week. Nevertheless, Wintermute points out that part of these flows may relate to arbitrage strategies rather than directional purchases. This would explain why the price remains trapped between $63,000 and $66,000.

Finally, some traders are waiting for a possible low point around October, in line with the four-year cycle associated with halving. This positioning reduces immediate demand. Conversely, Bitcoin's ability to hold $64,000 despite a restrictive Fed and several significant sales reflects a resilience that some consider underestimated. And that could be good news for the future.

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