What Happens to Bitcoin and Crypto During a Stock Market Crash?

TLDR

• Bitcoin fell in 93% of four-week periods when global stocks dropped at least 5%, JPMorgan found.
• In those periods, stocks lost about 8% on average while Bitcoin lost about 13%.
• Bitcoin dropped nearly 40% on 12 March 2020 as stocks plunged.
• Ethereum and smaller coins can be even more volatile than Bitcoin.
• Wells Fargo found Bitcoin’s volatility averaged about 60%, versus 19% for the S&P 500.

---

Bitcoin and other cryptocurrencies have often fallen when the stock market crashes. Bitcoin was first promoted as an asset that works apart from banks, governments and stock exchanges.

Over time, it has become more closely tied to Wall Street. That link has raised questions about whether Bitcoin can act as a safe haven for investors. Its price now often moves in the same direction as stocks during sell-offs.

Bitcoin Often Falls When Stocks Drop

JPMorgan’s 2026 research found Bitcoin declined in 93% of four-week periods when global equities fell by at least 5%. In those periods, global stocks lost about 8% on average. Bitcoin fell about 13%.

Gold, by comparison, recorded a small average gain in those periods. Bitcoin lost more than the stock market did.

The March 2020 COVID-19 crash is one example. Bitcoin lost nearly 40% on 12 March, one of its worst trading sessions. It briefly fell toward $3,850 the next day as panic selling spread.

A similar pattern appeared in the 2022 bear market. Rising interest rates and tighter financial conditions pressured both technology stocks and cryptocurrencies. Both markets declined that year.

The International Monetary Fund found that Bitcoin’s correlation with the S&P 500 rose after the pandemic. The increase was most visible during periods of financial uncertainty. The IMF published its findings in a January 2022 blog post.

Several factors can explain the link. Institutional investors hold both asset classes, so widespread selling can hit both markets at once. Rising interest rates also reduce demand for speculative assets.

Leveraged crypto positions can trigger forced liquidations, which can speed up declines. Crypto markets also trade around the clock. That lets investors sell on weekends and overnight, even when stock exchanges are closed.

Recovery Is Not Guaranteed

After the March 2020 collapse, Bitcoin recovered and later reached new record highs. Global liquidity expanded and institutional adoption increased during that time.

Recovery is not guaranteed, though. Ethereum and smaller cryptocurrencies can be even more volatile, particularly when liquidity dries up and investors leave speculative tokens. Volatility measures how widely prices swing over time.

Stablecoins can carry risks too. In March 2023, USDC briefly lost its dollar peg after the collapse of Silicon Valley Bank. USDC is a stablecoin meant to track the US dollar.

Bitcoin’s fixed supply, decentralized network and growing institutional access could support future demand. None of these features guarantees higher prices.

The research points to a diversified portfolio, limited crypto exposure and avoiding excessive leverage as risk-management approaches. These were described as more reliable than trying to predict a market bottom.

The most recent data comes from Wells Fargo research published in July 2026. It found Bitcoin’s annualized volatility averaged about 60% from June 2018 to June 2026, compared with 19% for the S&P 500.