Stock markets reached new highs last week, bitcoin and ethereum in decline

Cryptocurrencies are often described as a class of risky assets that tend to perform poorly during times of economic uncertainty. Although the stock market also falls into this category, at least to some extent, it has risen over the past few weeks, with multiple new all-time highs from the most prominent indices.

At the same time, cryptocurrencies have suffered a decline, with the largest digital assets falling since March.

American stock market on the rise

Perhaps fueled by the hype around Nvidia, the American stock market has been on a significant rise since the beginning of the year. Take, for example, the largest and undoubtedly the most prominent index, S&P 500. In 2024, it started trading below 4800, but surged to about 5500 earlier this week to record a new peak.

Nasdaq Composite is on an even more impressive streak, having risen by 19.8 percent since the beginning of the year and reaching its own peak of nearly 18 thousand this week.

Dow Jones Industrial Average, which has little to do with the technology sector and is not exposed to Nvidia, however, has underperformed. Its annual gain is less than 4 percent, but it still managed to achieve a new all-time record earlier this year of around 40 thousand.

The situation with risky crypto assets like bitcoin and ethereum is quite different, at least over the past few weeks.

What about crypto?

Bitcoin’s year has also been quite optimistic, fueled by the approval of spot bitcoin ETFs in the U.S. in January. Although the fourth halving also occurred earlier this year, an event that is typically seen as a catalyst for bull markets, the asset has actually performed worse after the halving.

Ethereum has also experienced regulatory support from the U.S. SEC, as the agency greenlit spot ethereum ETFs last month. However, they have not yet been launched, and the price has lost almost all the gains that came after the positive news.

Both bitcoin and ethereum have fallen by about 10 percent from their annual peaks and have decoupled from the U.S. stock markets. Nevertheless, it is worth mentioning that, although they have been declining in recent weeks, they are still in a greater plus than the aforementioned indices.

Bitcoin has risen by 50 percent since the beginning of 2024, while ethereum has risen by 54 percent in the same timeframe.