Bitcoin has overtaken the S&P 500 and gold: here is what happens from here

Bitcoin has completed a sharp jump of about 20% in the last week and approached the $80,000 threshold, its highest level since May — thus making the world's largest currency an asset that has yielded a better return in the last six months than both gold and the leading S&P 500 stock index.

The main catalyst came precisely from the bond market: the US Treasury's announcement of expanding purchases of long-term government bonds, a move that weakened the dollar and pushed bond yields downward.

On August 19, the US Treasury announced it would increase the volume of long-term bond purchases, and Treasury Secretary Scott Bessent confirmed the next day that the volume of each operation might exceed $4 billion, a doubling of the previous ceiling. Long-term yields fell following the announcement, which reduces the "opportunity cost" of holding non-interest-bearing assets like Bitcoin and gold.

"The Treasury changed the conversation in the market even if it didn't change monetary policy," said Steven Innes, a global strategist at Quintex Intel. According to him, Bitcoin has become the "high-beta brother" of gold in the same macro trade, meaning a sharper reaction to the same forces.

According to Dow Jones Market Data, in the six-month window, Bitcoin is now overtaking the two assets to which it is usually compared. For comparison, the S&P 500 index rose about 11% in the same period, and gold, which enjoyed a rally of its own this year, remained behind in this window. It is important to qualify: despite the jump, Bitcoin is still recording a decline since the beginning of 2026, after starting the year around $87,000.

The rally is also fueled by an internal mechanism. The price increase forced traders who bet on a decline to close positions, in what is called a "short squeeze," and according to reports, more than $4 billion in such bets were liquidated.

At the same time, institutional money has returned: US Bitcoin ETFs raised about $1.9 billion in a week, the strongest weekly inflow since October. BlackRock's IBIT fund, the largest in the category, alone raised about half a billion dollars on Friday — its strongest inflow day since January.

At Tom Lee's Fundstrat investment house, they estimate that this time the move is stronger. In a letter to clients, it was written that the rise that followed the short squeeze suggests that the rally may be "more durable than a technical correction." The firm points to strong inflows into ETFs, an increase in trading activity, and the fact that in the options market, investors are already paying for exposure to future gains and not just a short-term jump.

In addition, the firm emphasized that Bitcoin rose without new purchases from Strategy, the world's largest institutional holder, which has not bought coins for two weeks — meaning there is additional potential fuel if it returns to the market.

Alongside the optimism, there are warning signs. The BTIG investment house mentions that a similar jump in January 2023 faded initially before the currency found support. Technical indicators point to "overbought," and around $74,000 to $78,000, heavy supply awaits that could act as a brake.

On the other hand, at Standard Chartered Bank, they remain bullish: the bank's head of digital asset research, Geoffrey Kendrick, wrote that a forecast of $100,000 by the end of the year is too low.

For investors, the conclusion is twofold. First, the story illustrates how much macro decisions in Washington, and primarily dealing with the US debt, directly move the Bitcoin and gold in the portfolio. Second, this rally is built to a large extent on leverage and short liquidations, and therefore it is volatile by nature.

Anyone considering exposure now, whether through ETFs or directly, should remember that after such a jump, the risk of a sharp correction increases. The above is not a recommendation, and any decision requires personal adjustment and risk management.