Bitcoin is on track for a fourth consecutive year of negative summer performance, while the S&P 500 could achieve its third straight seasonal gain if its current streak holds. Analysis of data from 2020-2024 reveals a growing divergence between the two asset classes.
From 2020 to 2024, the S&P 500 posted positive returns in July and August eight times, while Bitcoin achieved this six times. A closer examination since 2020 highlights that Bitcoin’s summer struggles stem less from seasonal patterns and more from “crypto-native shocks” and broader economic trends, such as China’s mining ban, Bitcoin halving events, and post-COVID inflation.
Bitcoin Starts Decade “Hot” Despite China Crackdown
June 2020 saw Bitcoin drop 3.18%. However, the month began with strong momentum after Bitcoin surpassed $10,000, a level not seen since February’s COVID crash, following the May halving. This momentum continued in July.
Global stimulus, near-zero interest rates, and the rise of “DeFi Summer” boosted both equities and crypto in summer 2020. The S&P 500 ended June, July, and August positive for the eighth consecutive year. Bitcoin’s summer performance peaked in 2021 at +8.68%, though June 2021 started with turmoil.
China’s intensified crypto crackdown in May 2021, followed by institutional interest from figures like Elon Musk and Jack Dorsey helped Bitcoin recover, but it still posted its only positive summer performance to date.
Fed Rate Hikes, Terra Collapse Test Bitcoin in 2022
2022’s summer was among Bitcoin’s worst. Beginning with the Terra/Luna collapse in May, the month brought contagion across the crypto industry and Fed rate hikes.
Despite the S&P 500’s strong July performance (its best since price tracking began), optimism faded. Powell’s Jackson Hole speech in August confirmed aggressive policy tightening, leading to a negative correlation between Bitcoin and the S&P 500 for the remainder of the summer.
ETF Approval Fails and Halving Weigh on 2023
2023 bucked the trend, with Bitcoin rising 12% in June following ETF application momentum. However, the S&P 500 lagged due to cooling tech sentiment. Both assets finished the summer down in August, hurt by a negative Jackson Hole speech and China’s Evergrande bankruptcy.
2024 followed a similar pattern. A June slump was driven by weak ETF flows, miner sales after the halving, and macro uncertainty. While the S&P 500 benefited from AI optimism and Fed confidence, the summer concluded with a negative return for Bitcoin.
Integration and Vulnerabilities: The Evolving Narrative
Bitcoin’s performance increasingly mirrors traditional markets, particularly during July earnings season and August’s Federal Reserve communications. However, its integration is incomplete.
While institutions increasingly allocate to crypto via ETFs and treasuries, Bitcoin remains uniquely susceptible to “crypto-native shocks” – events like regulatory crackdowns, internal market dynamics (halving cycles), and network-specific incidents, unlike traditional markets dominated by earnings, rates, and macroeconomic data. This explains why Bitcoin’s summer performance is less consistent, driven by a complex mix of internal and external catalysts. Ongoing geopolitical tensions, including the conflict between Israel and Iran, pose further macro risks that could impact risk sentiment and asset prices across the board.
