Bitcoin Officially Decouples From S&P 500, and Jim Cramer Has Concrete Reason for It

Bitcoin surged 10% to $66,800 just a day after a 17% crash, while the S&P 500 took only a 0.47% upside, causing Wall Street to take notice. Popular TV host Jim Cramer points to the phenomenon of “leverage rotation,” saying investors sold their stocks to capitalize on Bitcoin.

The setup shows a bigger change — Bitcoin is separating itself from regular markets when things get stressful. Gold and silver also rose, but neither matched $BTC's upside pull. Crypto is making a comeback after losing ground in a liquidation death spiral, and equities are feeling the impact.

The Bitcoin rally's impact on the S&P shows you the leverage that's in the system. People sold the S&P to finance their bitcoin

The result is not just an anomaly — it is a sign that capital may be exiting stocks for something riskier this Friday.

Bitcoin becomes Wall Street's leverage

According to Cramer, the rally on Bitcoin ($BTC) showed just how much leverage is built into the system. His theory is that investors are offloading their S&P 500 positions to put their money into Bitcoin instead.

Whether it is meant as serious criticism or just a general assessment, the data seems to back up his point. And it is not just stocks taking a hit.

Bitcoin is now traded like its own asset class, especially when liquidity tightens. Risk-on days used to lift all boats. Not this time. While Bitcoin soared, capital rotated violently out of equities.

Even traditional safe havens like gold (+2.77%) and silver (+5.68%) could not match $BTCs magnetism.

Looking at the big picture, the S&P 500 had been holding on near record highs above $7,000 for a while, but then it took a big dip in February. On Tuesday, it had its worst day since October, dropping below its short-term support level.

The idea that Bitcoin would eventually become separate from traditional markets during big economic problems is now happening, though in a weird way.