Bitcoin Poised to Catch Up with Small-Cap Market Highs Despite Current Lag
The Federal Reserve began purchasing Treasury bills later on Friday with an initial amount of $8.2 billion as part of a $40 billion reserve management program set to run through April. Concurrently, the Russell 2000 index hit a record high, while other U.S. indices and metals reached peaks, and the Nasdaq 100 approached an all-time high.
Despite this broad equity strength, Bitcoin was trading approximately 27% below its October peak. Historical patterns have indicated that cryptocurrency often aligns with small-cap cycles over time and tends to catch up after periods of lag.
Goldman Sachs projects that the Russell 2000 will experience earnings per share growth of around 49% in 2026, suggesting improving macroeconomic conditions that could realign Bitcoin and the broader cryptocurrency market with small-cap strength.
Market pricing reflects expectations of roughly 50 basis points in rate cuts over the next 12 months according to the CME Fed Watch Tool, which is supportive of riskier assets including cryptocurrencies.
The Fed's Treasury bill purchase schedule was sourced from ZeroHedge. Notably, Bitcoin's price has shown significant highs in recent years, peaking around $69,000 in November 2021, exceeding $90,000 in November 2024, and reaching approximately $126,000 in October 2025. The recent divergence between Bitcoin and small-cap performance highlights potential for Bitcoin to catch up in the near term. At the time of reporting, Bitcoin was priced around $92,578.55.
