I'm not sure about the connection that you're making between S&P500 rising with BTC rising. This is a correlation that a lot of people like to cite, but I still haven't seen solid evidence for in terms of them moving in accordance to one another.
Some people attribute this to the potential Fed rate cuts, but I don't think that's the case either.
With BTC it's purely a cyclical thing, where the market has consolidated long enough within the bear market for bullish sentiment to be reinjected, and weak hands and panic dumpers to be washed out. I think that the political instability especially in Asia have at least contributed to the bull runs of both gold and BTC, because people are looking for a safe haven to park their assets.
In regards to the stock market though, I still think that there are companies that are extremely overvalued that will correct soon. This could just be short term noise.
Apparently, the recent price surge in bitcoin wasn't only related to bitcoin but rather the motive was to have a huge investment in all of the big major assets,thus bitcoin and SP500 being a few among the rest. Read this post by theymos:
I think that the market has long been dominated by the aftereffects of quantitative easing, and the current thing is just another ripple of that. There's simply a worldwide glut of money.
In QE, the Fed bought MBSes and treasuries, which basically amounted to printing $3 trillion and giving it to everyone who was holding those things; namely, banks and various investors (mostly institutional). For comparison, M3 money supply is currently $14.5 trillion. What do these groups do when they get tons of money? They're investors, so they reinvest it, especially in bonds/stocks, but also in things like BTC. They don't buy food or gadgets or whatever. IMO this is why stocks have been going up at an unnatural rate for a while even though the CPI doesn't grow out of control. Eventually the money makes its way out to ordinary shareholders, but shareholders also have a tendency to reinvest rather than spend, so the process of money escaping the investment universe is slow.
The Fed has been slowly unwinding QE, though they're talking about stopping that (after eating only about a quarter of what they printed). They also continue to print money in their open market operations.
I don't know how this will play out long-term. I suppose that the inflation in investment-asset prices will eventually have to leak into CPI, but it might be gradual enough to not cause a catastrophe. It might end up being a sort of loan, paid to investors, and paid by holders of dollars over the next several decades.
Anyways, the world economy is just gonna probably end up in a worse clusterfuck than we have ever seen,the more the money goes in investments, the more easier it gets for an economy to tremble into ashes. Global Supply and demand has become an outright joke right now. Mind you, if people don't pay attention towards strengthening the global economy, we would soon have an existential crisis.
