Is this a dangerous signal in a bull market or a good opportunity to get in?
While the US stock market quietly sets new historical highs, Bitcoin has unexpectedly fallen behind. The market's direction is quietly shifting.
As an old hand in the crypto market for many years, I have to admit that the financial markets at the end of 2025 are staging an unprecedented differentiation drama. The S&P 500 index has risen 16% this year, while Bitcoin has fallen 3%. This is the first time in 11 years that the stock market has strengthened while Bitcoin has weakened.
What’s even more surprising is that while gold surged past $4,100 per ounce, Bitcoin has been fluctuating around $86,000, struggling to break through the critical resistance level of $90,000. What market logic is hidden behind this divergence?
01 Market differentiation, funds are quietly shifting
The current market landscape is confusing: U.S. stocks continue to rise, gold surges, while Bitcoin is stuck. This phenomenon of triple differentiation is rare in financial history.
Data shows that the correlation between Bitcoin and the S&P 500 index has fallen to a three-year low. This 'decoupling' phenomenon is not coincidental, but has deep market logic behind it.
On one hand, the surge in artificial intelligence stocks has driven the Nasdaq higher, and a surge in corporate capital expenditure has brought funds back to the stock market; on the other hand, the dollar index has plummeted below 98 this year, coupled with the uncertainty of 'stagflation' in the U.S. economy, prompting institutional investors to start seeking 'alternative routes.'
Gold has become the biggest winner in this wave of market activity. Since 2025, gold prices have once surged over 65%, and even after experiencing a sharp correction in late October, London spot gold still stands above $4,100 per ounce. This performance makes all risk assets look small in comparison.
02 Why has Bitcoin been neglected?
In the face of gold's strong performance, why does Bitcoin seem weak? I believe there are three main reasons:
The adjustment of institutional capital allocation priorities. When market uncertainty increases, large funds tend to prioritize traditional safe-haven assets. Global central banks purchased a net amount of 415 tons of gold in the first half of the year, and the People's Bank of China has increased its holdings for 10 consecutive months. This demand for allocation is unlikely to shift to the Bitcoin market in the short term.
Bitcoin's momentum dependency characteristics. Matt Maley, chief market strategist at Miller Tabak, pointed out the key: 'Bitcoin is essentially a momentum-dependent asset. However, this year, precious metals have siphoned off a significant amount of momentum funds that could have flowed into Bitcoin.'
The need for market leverage to clear. In recent weeks, the inflow of funds into cryptocurrency exchange-traded funds has decreased, and the de-leveraging impact in the derivatives market is significant. The current market is in a long consolidation phase under high selling pressure and needs time to digest previous gains.
03 The deeper logic behind gold's surge
The rise of gold is by no means coincidental; it is built on three solid foundations:
Global central banks are strategically increasing their gold holdings. IMF data shows that the value of global gold reserves as a share of foreign exchange reserves has risen from 24% in December 2024 to 29% in June 2025, while the share of dollar reserves has dropped from 54% to 52%. This trend is structural, not a short-term fluctuation.
The dollar credit system is facing a trust crisis. The U.S. federal government's debt is massive, and fiscal sustainability is under challenge, undermining market confidence in dollar assets. More and more countries are promoting diversification of reserve assets, with gold becoming the optimal choice.
Geopolitical risks continue to ferment. The U.S. government's shutdown crisis has lasted for 23 days, and if it continues past November 4, it will become the longest shutdown in history. This uncertainty further strengthens gold's safe-haven attributes.
04 Bitcoin and gold: not substitutes but complements
Some believe Bitcoin is 'digital gold' that will replace traditional gold. However, I believe these two assets are forming a complementary relationship rather than a substitutive one.
Bitcoin is no longer just a speculative asset; corporations are significantly increasing their holdings, with companies like MicroStrategy listing it as a long-term asset allocation. After the opening of the ETF institutional channel, the inflow structure has shifted from retail-driven to institution-driven. It is transforming into a 'growth-oriented safe-haven asset' that possesses anti-inflation properties and capital appreciation potential.
Gold has maintained its status as the 'ultimate safe-haven' asset, with an annual volatility of less than 20%, making it a stabilizing force in central bank reserves.
The modern market has entered an 'era of multipolar safe-haven'. Investors no longer rely on a single asset to hedge risks, but dynamically allocate between gold, Bitcoin, and even some stablecoins. When sovereign credit is under pressure, both rise; when short-term sentiment corrects, capital flows between the two.
05 My investment strategy and recommendations
In the face of the current complex market, my personal strategy is: stay calm, deploy in batches, and maintain dynamic balance.
In the short term, Bitcoin may continue to oscillate in the range of $85,000 to $88,000. The market is waiting for a real trigger point; before new liquidity injections, prices are likely to remain in a consolidation phase. The key support level is around $81,000, and if it falls below this, a deep correction should be anticipated.
In the medium to long term, I remain optimistic about Bitcoin. Grayscale explicitly pointed out in its 2026 outlook, 'The Dawn of the Institutional Era', believing that improved regulation, ETF capital support, stablecoins, and asset tokenization will be the core driving forces for pushing Bitcoin to new highs.
My specific recommendations are:
1. Allocate 5-10% of the investment portfolio to gold as a basic safe-haven asset;
2. Maintain a dollar-cost averaging strategy for Bitcoin, using volatility to dilute costs, rather than making a significant one-time investment;
3. Pay attention to the Federal Reserve's policy trends, especially after the new chairperson is confirmed;
4. Be patient, the market needs time to digest consensus and rebuild confidence.
The market always oscillates between fear and greed. Currently, gold is in high demand, while Bitcoin is temporarily neglected, but this does not mean a change in the long-term trend. True investment opportunities often arise during market differentiation, not in the spotlight of popular assets.
A seasoned trader once told me: 'Bull markets are born in pessimism, grow in skepticism, mature in optimism, and die in euphoria.' The current market differentiation may provide us with an opportunity to calmly reassess asset allocation.
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