The 90-day rolling correlation between Bitcoin and the Nasdaq 100 has slid from roughly 0.78 last summer to around 0.31 in recent weeks, a drop of more than 60% that breaks a two-year pattern. Investor Mike Alfred argues the cause is not regulatory noise around the CLARITY Act or Binance, but a straightforward valuation gap: BTC and ETH look cheap, U.S. large caps look stretched, and capital is finally pricing the difference.
By the numbers
Start with the equity side. The S&P 500 trades near a forward P/E of 22.4x, against a 25-year average of about 16.8x — a premium of roughly 33%. The Shiller CAPE ratio sits around 36, more than 2x its long-run median of 17. Tech-weighted indices push the gap wider: the Nasdaq 100 forward multiple is close to 28x, the highest reading outside the 2020-2021 stimulus window.
Now flip to crypto. Bitcoin's market cap-to-realized-value (MVRV) ratio is hovering near 1.8, against a cycle-peak average of 3.5 and a prior-cycle top above 4.7 — meaning BTC is trading at roughly 51% of its historical overheated zone. Ethereum's MVRV is even softer at about 1.3, a 72% discount to its 2021 peak. Active addresses on both chains are up double digits year-over-year while supply on exchanges has contracted: BTC exchange balances are down about 14% over twelve months, ETH balances down roughly 19%.
What the data says
The decoupling is showing up in returns, not just correlations. Over the trailing 30 days, Bitcoin is up about 8.4% while the S&P 500 is flat to down 1.2% and the Nasdaq 100 is off roughly 2.6%. Ethereum has outperformed both, gaining close to 11% in the same window. That is a relative spread of nearly 10 percentage points between ETH and the Nasdaq in a single month — a divergence the market has not produced consistently since early 2023.
Macro inputs reinforce the gap. Real 10-year yields are still around 1.9%, equity risk premiums on the S&P have compressed to roughly 0.4% — the thinnest cushion in two decades — and earnings revisions for the Q2 cycle have been negative for three consecutive weeks. Against that, BTC's stock-to-flow remains above 56 post-halving, and ETH net issuance has been near zero or slightly negative for most of 2026.
The takeaway
If Alfred's read is correct, the correlation breakdown is a symptom, not a strategy shift. The pricing math is doing the work: equities at a ~33% premium to historical norms, BTC and ETH at meaningful discounts to prior cycle peaks, and capital migrating toward whichever side of the trade offers the larger margin of safety. A reversion in either direction would close the gap — but until it does, the spread itself is the story. Watch the 90-day correlation. If it stays below 0.4 through the next CPI print, the decoupling is structural, not seasonal.