Record Stocks and Rate Cuts Are Weighing on Bitcoin’s Hedge Narrative

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S&P 500 futures (left) vs. Bitcoin/USD. Source: TradingView

Bitcoin’s difficulty holding $90,000 comes as traditional markets surge. The S&P 500 reached fresh all-time highs in December, supported by lower interest rates and heavy investment in artificial intelligence infrastructure.

As borrowing costs fall, equities benefit directly through higher valuations and improved corporate balance sheets. This dynamic has reduced Bitcoin’s appeal as an alternative hedge, especially as inflation concerns limit the Federal Reserve’s ability to stimulate aggressively despite rising unemployment. For now, investors appear more comfortable chasing equity gains than reallocating into crypto.