Bitcoin suffered a 32.9% year-to-date loss through the second quarter of 2025, a stark divergence from the record 64.7% equity fund allocation tracked by EPFR Global. While the Nasdaq 100 gained 27.7% and technology equities rose 43.5% over the same period, Bitcoin continued to slide, pressured by crypto-specific factors that overrode its usual correlation with the S&P 500.
The Decoupling
The 3-month correlation between Bitcoin and the S&P 500 remained high, but performance diverged due to supply-side dynamics. Strategy, once the largest corporate Bitcoin buyer, authorized approximately $1.25 billion in sales, flipping from treasury buyer to seller. Spot Bitcoin ETFs shed $4.9 billion in outflows during the second quarter, though flows turned positive in mid-July, offering a tentative sign of recovery. Bitcoin was trading near $63,871 as of mid-July 2025.
Stretched Equity Positioning
Equity positioning is extremely stretched across multiple metrics. Trend-following CTAs are at the 72nd percentile of their historical range, and volatility-control funds at the 91st, according to data cited in the report. Cash levels are at historically low levels, per Bank of America's fund manager survey, and systematic funds are heavily long equities, according to Deutsche Bank. Societe Generale strategists noted that bond and money market funds have drawn heavier inflows than stock funds this year, yet equity assets still dominate at 64.7%. JPMorgan's Market Intelligence desk described the environment as 'even better than Goldilocks could have imagined' for market bulls.
What Bitcoin Needs
NYDIG argues that a lasting recovery for Bitcoin requires sustained ETF inflows and renewed stablecoin supply growth. The positive turn in ETF flows in mid-July provides a glimmer of hope, but the $4.9 billion in prior outflows means the selling pressure is far from exhausted. The next test for Bitcoin will be whether the mid-July inflow trend can be sustained in the coming weeks, and whether stablecoin supply begins to expand again.
