Overvalued S&P 500 Signals Crypto Risk After Record $2.6T Call Options Surge

Analysts warn overvalued U.S. equities—with S&P 500 P/E10 at 37.9, 114% above long-term average—could transmit a correction to crypto amid strong co-movement. Record $2.6 trillion S&P 500 call options volume on May 6 (60% of activity, highest in 7+ years) fueled 12% Q2 gains to new highs and Bitcoin's 16% rise toward $80,000 via renewed correlation. However, a negative Bitcoin Coinbase Premium for over 10 days and May 7 pullback (S&P -0.38%, BTC -1.7%) highlight weakening demand and potential liquidity spillovers.