Bitcoin's first-quarter slump in 2026 capped an unusual run: nearly six months of underperformance against U.S. equities, a stretch with no historical precedent.
Mark Connors, founder of Risk Dimensions, said the duration of the gap — not just its size — is the standout feature. Data shows Bitcoin consistently lagging the S&P 500 since early October. Previous pullbacks have been sharper but much shorter. Bitcoin dropped roughly 22% in Q1 2026, following a 25% decline in the final three months of 2025. Over the same period, the S&P 500 fell far less, leaving a wide performance gap.
The weakness occurred amid broad market troubles. U.S. equities recorded their worst quarter in four years, with the Nasdaq down more than 10% from recent highs. The combined decline across stocks and crypto erased much of the post-2024-election rally.
Policy progress has been uneven. A new SEC chair has helped clear the path for more crypto ETFs, and lawmakers advanced measures such as the GENIUS Act. Trump also signed an August executive order making it easier for 401(k) plans to include alternative assets like crypto, private equity and real estate; the Labor Department proposed a rule in response on Monday.
March Showed Resilience: Bitcoin Held Ground Amid Geopolitical Shock
Despite the weak quarter, Bitcoin performed better in March than many expected.
The early March escalation between the U.S. and Iran sent shockwaves through global markets, driving oil and the dollar higher as investors reacted to supply risks. Volatility hit all asset classes. Gold, often a safe haven, saw extreme swings as margin calls and urgent liquidity needs forced selling by institutions and sovereign entities — one of the most severe short-term dislocations in decades.
Bitcoin did not experience the same level of forced unwinding. The crypto rose about 1% in March, while gold fell 11% over the same period. "It really hung in there," Connors said. He attributed that stability partly to earlier liquidations that cleared out leveraged positions. Bitcoin's ability to move quickly across borders may also limit forced selling compared with physical assets.
Going forward, market attention will shift to ETF flows, regulatory developments, and whether macro conditions improve. Breaking the underperformance streak depends on liquidity and risk appetite.