Stocks are rallying alongside Bitcoin, challenging the narrative of decoupling between cryptocurrencies and equities. The total crypto market capitalization increased by 8.5% since March, despite weak US manufacturing data and ongoing trade tensions. Bitcoin and major altcoins have closely mirrored the movements of the S&P 500. A full decoupling would have established cryptocurrencies as an independent asset class amidst recession fears, however, current correlations suggest that cryptocurrencies might still be influenced by equity markets. The S&P 500 has shown resilience despite persistent trade disputes, bolstered by strong corporate earnings from companies like Microsoft and Meta, which mitigated concerns over the trade war and potential investment reductions. Furthermore, attention is shifting towards the Federal Reserve's liquidity plans following a year of balance sheet reduction. Such increased liquidity could benefit risk-oriented assets, including cryptocurrencies. While correlations persist in the short term, the recent growth of the crypto market compared to equities highlights a more complex relationship that does not indicate perfect synchrony over longer periods.

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