Despite recent years bringing overwhelming optimism for the cryptocurrency market as the latest ‘crypto winter’ ended, digital assets found mainstream appeal, and a friendly U.S. administration, Bitcoin (BTC) ended up underperforming stocks in the last 12 months.
Specifically, while the benchmark S&P 500 index soared 26.98% from 5,921 to 7,519 across the previous 52 weeks, BTC declined 30.35% from $108,927 to $75,867 for an overall underperformance of roughly 56%.
Additionally and perhaps more worryingly, 2026 has seen Bitcoin and most other cryptocurrencies move and consolidate lower while stocks appear to only be gaining pace in their year-to-date (YTD) rallies.
Why Bitcoin is underperforming the S&P500 by more than 50% in last 12 months
An interpretation of events that was popular on the social media platform X early in the year was that BTC was following its established cyclical path.
For example, the popular on-chain analyst Ali Martinez explained that the then ongoing Bitcoin plunge was an expected outcome of the highs above $125,000 recorded late in 2025 and forecasted – based on past performance – the digital asset would bottom in October at no lower than $38,000.
Institutional investors believe Bitcoin will make a comeback in 2026
Notably, the relative newcomers to the market – major financial institutions – took a starkly different view, effectively declaring the traditional pathway of assets such as BTC obsolete.
For example, Bernstein estimated that the 2026 cryptocurrency bear case had no legs while setting its end-of-the-year Bitcoin price target at $150,000. Similarly, while Standard Chartered lowered its forecast from $150,000, it still opted for a bullish prediction that would place BTC at $100,000.
Critics, however, speculate that the entire sector is, in a way, suffering from success.
Is the cryptocurrency market out of growth ideas?
For years, cryptocurrencies have relied on revolutionary narratives about the transformation blockchain technology will provide, while blaming unjust regulatory pressure – usually personified in the form of former SEC Chair Gary Gensler – for any setbacks.
By 2026, the asset class had gained significant institutional recognition and a friendly regulatory environment without providing much in terms of material revolutionary changes, other than helping a mass proliferation of prediction markets.
Meanwhile, some explanation for the relative stagnation of cryptocurrencies despite the numerous tailwinds can, perhaps, be found precisely in the S&P 500’s success.
Along with the hopes that blockchain would bring a financial revolution, digital assets found some of their popularity in their volatility and potential to rapidly turn hundreds or thousands of dollars into hundreds of thousands or millions.
When investing in stocks leads to bigger, faster returns than Bitcoin
By press time on May 27, stocks have, in part, occupied that particular role thanks to the artificial intelligence (AI) boom – or thanks to the AI bubble.
For example, a $1,000 investment in Bitcoin at the end of 2022 – near the low point of the previous ‘crypto winter’ – would have become roughly $4,500 with the cryptocurrency rising from approximately $17,000 to $75,867.
A similarly timed purchase of Nvidia (NASDAQ: NVDA) equity would have led to $1,000 turning into about $14,000 as the stock soared from $17 to almost $215.
Even selling BTC near its highs close to $125,000 would have turned $1,000 into $7,300 for a $6,700 profit smaller than from holding NVDA shares.
There are more ‘altcoins’ among 2026 stocks than cryptocurrencies
Lastly, the promise of large and rapid returns of the stock market outpacing cryptocurrencies in 2026 extends beyond just the world’s largest digital asset and the world’s largest company.
Examining the YTD heatmaps of the S&P 500 and the cryptocurrency market reveals that major stocks recording triple-digit gains since New Year’s Day are, by press time, far more numerous.
Additionally, unlike digital assets that are, for the time being, suffering from a lack of a sweeping bullish narrative, more traditional equities are riding high on the dominant and domineering vision for the future of AI.
Featured image via Shutterstock
