**Bitcoin’s Unusual Divergence from Markets Suggests a Major Mispricing**

Since October 10th, a striking divergence has emerged: U.S. stocks, led by the Magnificent 7, have rallied roughly 25%, while Bitcoin remains down approximately 8%.

For most of the year, Bitcoin moved in close correlation with major tech stocks. That relationship broke decisively following the severe crypto liquidation event in October. The paths since then have been opposite:

- The Mag 7 have continued their climb.

- Bitcoin has decoupled and languished.

- Year-over-year, the contrast is stark: Mag 7 up 24.7%, Bitcoin down 7.9%.

This decoupling contradicts the broader macroeconomic environment, which has turned notably supportive:

- The Fed has ended Quantitative Tightening (QT).

- The first rate cut has been delivered, with another anticipated.

- Global liquidity is expanding.

- The U.S. Treasury is injecting cash into markets.

- Japan and China have added liquidity.

- Stablecoin supply continues to rise.

Historically, these are the precise conditions that propel Bitcoin higher. Yet, its price action resembles a bear market, suggesting suppressed valuation rather than deteriorating fundamentals.

This leaves two plausible resolutions:

1. **Bitcoin catches up to equities** as rising liquidity and favorable macro flows take effect.

2. **Equities correct downward** to close the gap.

Given the outlook for the next 3–6 months—continued Fed easing, expanding global liquidity, and strengthening crypto inflows—the first scenario appears significantly more likely. Financial markets rarely sustain such a clear mispricing for long.

A reversion to Bitcoin’s typical correlation with risk assets could trigger a sharp and rapid upward move. This presents one of the most defined valuation disparities Bitcoin has seen in recent years.$BTC