Bitcoin Has Outperformed the S&P 500 Since September—Here’s Why

Bitcoin (BTCUSD), though volatile, has outstripped the returns of the S&P 500 since the beginning of September. The largest cryptocurrency has benefited from investor optimism driven by the Federal Reserve‘s rate cuts and the U.S. presidential elections, among other factors.

Since the beginning of September, bitcoin has gained more than 14%, while the S&P 500 has risen roughly 3%.

Stumbled in September, Roaring in October

Just like stocks, bitcoin didn’t have a particularly great start to September after a worse-than-expected jobs report raised concerns about the health of the U.S. economy. Bitcoin was trading below $60,000 at that time, but signals from the Fed about a potential rate cut coming soon helped the cryptocurrency gain some momentum.

The Fed announced a jumbo 50-basis-point rate cut on Sept. 18 and set expectations for more to come, sending bitcoin higher. Lower rates translate into lower yields for Treasurys, and that makes riskier assets such as bitcoin more attractive to investors.

Still, macroeconomic uncertainty weighs on bitcoin. Any economic data that suggests that the Fed could deviate from its rate-cutting cycle or that a recession is imminent has the power to derail this bitcoin rally.

There may also have been some sudden shift out of crypto assets into Chinese equities after the government there announced a blockbuster stimulus package in late September, but that trade has lost some steam as the optimism around more measures began fading.

What’s Driving Bitcoin Prices?

Bitcoin traded around $68,000 Wednesday after three robust days of inflows for bitcoin exchange-traded funds (ETFs). According to data from Farside Investors, bitcoin ETFs have seen nearly $1.2 billion in net inflows since last Friday.

U.S. presidential elections have also played a role in bitcoin price movements this year.

“The macro factors contributing to crypto performance are currently rotating away from monetary policy concerns to US election outcomes,” wrote researchers at Coinbase last week.

As part of a campaign agenda released Monday, Vice President and Democratic presidential nominee Kamala Harris mentioned “supporting a regulatory framework for cryptocurrency and other digital assets.”

Though there were no other details, this was the first time the Harris campaign has showed some support for the crypto industry, while her opponent former President Donald Trump has done so on many occasions.

“She knows crypto exists, it matters, and it isn’t going away. But it’s not the full-hearted embrace that crypto advocates have been hoping for,” Matt Hougan, Chief Investment Officer for Bitwise, wrote in a commentary Tuesday, adding that “little sliver of good news was enough to send bitcoin up 5%. Enough to push more than $500 million into bitcoin ETFs.”

Another recent boost for bitcoin prices came from failed cryptocurrency exchange Mt. Gox. In a recent notification, the exchange said that it will repay customers of a decade-old hack by October 2025 instead of the the end of this month. Many market watchers were concerned about bitcoin prices dropping fast with a huge amount of bitcoin hitting the markets as the repayments began in June.

“This could assuage near term concerns around supply,” wrote Coinbase researchers, who also noted that prior movements in bitcoin wallets associated with Mt. Gox have led to sudden declines in bitcoin prices.