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Bitcoin Is Down 30% This Year While the S&P 500 Soars — Here's What to Do With Your Crypto

By The Dropout Millions Team •

Bitcoin is sitting at $75,838 today — down nearly 30% from where it started the year — while the S&P 500 has quietly put together one of its best annual runs in recent memory. If you own both, your brokerage account is telling two very different stories right now, and the gap is about as wide as it gets.

The Stormrake CEO made headlines this week arguing that not owning Bitcoin is the real risk, even for retirees. That’s a bold claim. But before you let a bull-case soundbite drive a decision worth hundreds or thousands of dollars, it’s worth zooming out and building a clear framework for what the current data actually calls for.

Here’s a grounded, no-hype look at what’s happening, why it’s happening, and — most importantly — what you should actually do depending on where you stand.

The Numbers First: The Divergence Is Real and It’s Wide

Let’s anchor this in live data, not vibes.

As of May 27, 2026 (per Yahoo Finance):

  • S&P 500 ETF (SPY): $750.59, +27.7% year-to-date
  • Nasdaq-100 ETF (QQQ): $730.28, +40.7% year-to-date
  • Total Market ETF (VTI): $369.46, +27.8% year-to-date
  • Bitcoin (BTC-USD): $75,838.13, -29.7% year-to-date

That’s not a small divergence. The total return spread between QQQ and Bitcoin year-to-date is over 70 percentage points. Even against the broader stock market, you’re looking at a gap north of 57 points.

For context: if you put $10,000 into QQQ on January 1, you’d be sitting on roughly $14,070 today. The same $10,000 in Bitcoin would be worth approximately $7,030. Same year. Same economy. Very different outcomes.

Why Is Bitcoin Down While Stocks Are Up?

Understanding why this is happening helps you decide whether the divergence is temporary or structural — and that matters a lot for your next move.

Risk Appetite Is Concentrated, Not Broad

The 2026 stock rally has been driven heavily by a narrow group of large-cap tech and AI-adjacent companies. QQQ’s +40.7% YTD performance reflects massive flows into companies with real earnings, real revenue growth, and exposure to AI infrastructure buildout. Investors have been rewarded for picking specific high-quality growth assets — not for owning speculative ones.

Bitcoin, despite its mainstream narrative, still trades more like a high-beta speculative asset than a store of value during most market environments. When institutional money has a clear, high-conviction place to go (large-cap tech, AI), it tends to flow away from crypto rather than into it.

Regulatory Overhang Hasn’t Fully Cleared

Despite a more crypto-friendly regulatory environment in the U.S. than we saw in 2022-2023, institutional adoption has been uneven. Spot Bitcoin ETF flows have cooled significantly after the initial excitement, and there’s no clear near-term catalyst that would redirect the flood of capital currently chasing the AI trade toward Bitcoin specifically.

The “Digital Gold” Narrative Isn’t Working Right Now

The bull case for Bitcoin often leans on inflation hedging and dollar debasement. But with equity markets performing this strongly, most investors aren’t desperate for an alternative store of value — they’re chasing returns that equities are already delivering. The hedge narrative tends to gain traction when stocks are struggling, not when the S&P is up 27% in five months.

So Should You Buy, Hold, or Sell?

This is the part where most finance content gets vague. Let’s be specific instead. The right answer depends entirely on your situation — and there are three of them worth addressing directly.

Scenario 1: You Already Own Bitcoin and You’re Down

First, do not make a decision based on what the Stormrake CEO said, what a Reddit thread says, or what Bitcoin’s price did yesterday. Make it based on your own financial position.

Ask yourself three questions:

  1. Does this money have a job in the next 1-3 years? If you’re counting on this capital for a house down payment, emergency fund, or near-term business investment, a -30% asset is not the right place for it. Consider reducing exposure and moving into something with a clearer floor.

  2. Is Bitcoin more than 5-10% of your total investable assets? For most people in their 20s and 30s building a portfolio from scratch, a 5-10% allocation to crypto is a reasonable speculative position. If Bitcoin has drifted above that threshold — or was always above it — a drawdown like this is a good forcing function to right-size the position.

  3. Do you actually believe in the long-term thesis? Not because a CEO told you to — but because you’ve read the case, you understand what you own, and you’ve decided it belongs in your portfolio. If yes, holding through volatility is rational. If no, you’re just bag-holding on hope.

The tax angle matters here. If you’re sitting on a loss, this may actually be an opportunity to harvest it. Selling at a loss and repurchasing after the required window (crypto currently has no wash-sale rule under IRS rules, unlike stocks — though this has been under legislative discussion) lets you lock in a capital loss that offsets gains elsewhere in your portfolio. That’s real money back in your pocket.

Scenario 2: You Don’t Own Bitcoin and You’re Wondering If You Should Buy the Dip

A -30% move sounds like a discount. It might be. It might also be the beginning of a deeper correction — Bitcoin has previously dropped 70-80% from peak to trough during extended bear markets.

If you’re considering entering a position for the first time:

  • Start small. A 2-5% initial allocation lets you get exposure without making a bet-the-farm decision based on a moment of FOMO.
  • Use dollar-cost averaging. Don’t lump sum into a volatile asset that’s in a downtrend. Buy a fixed dollar amount weekly or monthly for the next 3-6 months. You’ll average out your entry price and remove the timing pressure.
  • Fund it from your speculative bucket, not your core portfolio. Your index fund contributions — the boring, compounding backbone of your wealth — should not be reduced to buy Bitcoin. If you don’t have a speculative bucket, build the core first. See our guide on investing $100 a month and building real wealth for a framework.

Scenario 3: You Have No Crypto and You’re Perfectly Fine With That

The Stormrake CEO’s headline is designed to create urgency and FOMO. “Not owning Bitcoin is the real risk” is a marketing-grade claim, not a financial planning principle.

The S&P 500 is up 27.7% year-to-date (per Yahoo Finance). A simple, low-cost index fund strategy has dramatically outperformed Bitcoin in 2026. There is no rule that says you must own cryptocurrency to build wealth. Plenty of people will reach financial independence without it.

If crypto doesn’t fit your risk tolerance, your timeline, or your understanding of what you own — that’s not a gap in your portfolio. That’s discipline.

What the “Bitcoin = Mandatory” Narrative Gets Wrong

The CEO argument essentially says: inflation and dollar debasement make Bitcoin ownership non-optional. This is worth engaging with seriously rather than dismissing.

The kernel of truth: fiat currency does lose purchasing power over time. Diversification across asset types — including assets with low correlation to stocks — is a legitimate portfolio principle.

The overreach: conflating “inflation hedge” with “must own Bitcoin specifically” skips over a lot. Real estate, TIPS (Treasury Inflation-Protected Securities, issued by the U.S. Treasury), commodities, and even dividend-paying equities all serve as partial inflation hedges. The idea that Bitcoin is uniquely essential relies on a very specific macro scenario playing out on a specific timeline — and as 2026 has demonstrated, that scenario can fail to materialize for extended periods.

For practical portfolio construction guidance, including how to think about alternative assets, check out our piece on investing during market volatility in 2026 and our comparison of index funds vs. individual stocks.

A Framework for Any Volatile Asset

Whether you’re making decisions about Bitcoin, a single stock, or any speculative position, the same framework applies:

  • Position sizing: No single speculative asset should be large enough that a -50% move would materially derail your financial goals.
  • Time horizon: Volatile assets require long time horizons. If you can’t hold through a multi-year drawdown without financial stress, your position is too large.
  • Thesis clarity: You should be able to explain, in plain language, why you own something and what would have to be true for you to be wrong. Vague optimism isn’t a thesis.
  • Opportunity cost awareness: Every dollar in Bitcoin is a dollar not compounding in an asset that’s up 27-40% this year. That’s not a reason to never own crypto — but it’s a number worth acknowledging.

The Bottom Line

Bitcoin being down 29.7% YTD while SPY is up 27.7% (both per Yahoo Finance) is not a mystery — it reflects a market where capital has clear, high-conviction alternatives and isn’t desperate for speculative hedges. That could change. Markets rotate.

But your decision shouldn’t be driven by a bullish CEO quote or by the fear of missing out on a recovery that may or may not materialize on your timeline.

If you own Bitcoin and it fits your plan: hold or tax-loss harvest depending on your tax situation. If you want exposure and have none: start small, dollar-cost average, and fund it from money you can genuinely afford to lose. If you don’t want it in your portfolio: that’s a completely defensible position backed up by a year’s worth of return data.

Building wealth in your 20s and 30s is about consistency, not catching the next hot asset. Your complete wealth-building foundation matters far more than whether you time the Bitcoin bottom correctly.

Make the boring moves first. Let the speculative bets be exactly that — small bets, not the strategy.

The Dropout Millions Team

Sources & Data

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The Dropout Millions Team

About the Author

The Dropout Millions team includes personal finance writers, self-employed entrepreneurs, and former college dropouts who have navigated irregular income, self-directed retirement accounts, and debt payoff firsthand. Every article is reviewed for factual accuracy against IRS publications, SEC filings, and peer-reviewed financial research before publication. We are not licensed financial advisors—see our disclaimer for guidance on when to consult a professional.