The whole world is celebrating, so why is only the crypto industry "wintering"?

Article by: EeeVee

“As long as you don’t invest in cryptocurrencies, you can make money from everything else.”

Recently, the crypto world and other global markets seem to be experiencing two completely different realities.
In 2025, gold surged over 60%, silver skyrocketed 210.9%, and the Russell 2000 index of US stocks rose 12.8%; meanwhile, Bitcoin, after a brief new high, closed the year with a downward trend.
At the start of 2026, the divergence continues. On January 20, gold and silver hit new highs again, the Russell 2000 index outperformed the S&P 500 for 11 consecutive days, and the ChiNext 50 index in A-shares gained over 15% in a single month.
In contrast, Bitcoin on January 21 closed with six consecutive declines, dropping from $98,000 to once again fall below $90,000 without looking back.

Silver’s performance over the past year

It seems that capital has decisively left the crypto space since 1011. BTC has been oscillating below $100,000 for over three months, and the market has entered what is considered the “lowest volatility period in history.”
Disappointment is spreading among crypto investors. When asked about investors who left cryptocurrencies to profit in other markets, they even shared a “secret” — “Anything But Crypto” — as long as they don’t invest in cryptocurrencies, they can make money elsewhere.
The long-anticipated “Mass Adoption” now appears to be happening, but not in the way most expected—it’s not about widespread decentralized applications, but rather a fully “assetized” system led by Wall Street.
This round, the US establishment and Wall Street are embracing cryptocurrencies with unprecedented enthusiasm. SEC approved spot ETFs; BlackRock and JPMorgan are allocating assets to Ethereum; the US has included Bitcoin in its national strategic reserves; several state pension funds have invested in Bitcoin; even the NYSE announced plans to launch a cryptocurrency trading platform.
So, the question is: why, after Bitcoin has received so much political and capital endorsement, does its price performance remain so disappointing when precious metals and stocks are reaching new highs?
When crypto investors are used to watching US stock prices before trading to gauge crypto market trends, why is Bitcoin no longer rising in tandem?
Why is Bitcoin so weak?

Leading Indicators
Bitcoin is considered a “leading indicator” of global risk assets. Raoul Pal, founder of Real Vision, has repeatedly mentioned this in many articles because Bitcoin’s price is driven purely by global liquidity, unaffected directly by any country’s financial reports or interest rates. Its volatility often leads that of mainstream risk assets like the Nasdaq.

According to MacroMicro data, Bitcoin’s turning points in recent years have often led the S&P 500. Therefore, when Bitcoin’s upward momentum stalls and it can no longer hit new highs, it sends a strong warning signal that the upward momentum of other assets may also be nearing exhaustion.

Liquidity Tightening
Secondly, Bitcoin’s price remains highly correlated with the net liquidity of the global US dollar. Although the Federal Reserve cut interest rates in 2024 and 2025, the quantitative tightening (QT) that began in 2022 continues to drain liquidity from the market.
Bitcoin’s new high in 2025 was more due to ETF inflows bringing in new funds, but this did not fundamentally change the macro liquidity environment, which remains tight. Bitcoin’s sideways movement is a direct response to this macro reality. In a liquidity-scarce environment, it is difficult to initiate a super bull market.
The world’s second-largest liquidity source, the Japanese yen, is also tightening. In December 2025, the Bank of Japan raised its short-term policy rate to 0.75%, the highest in nearly 30 years. This directly impacts the key funding source for global risk assets: yen carry trades.
Historical data shows that since 2024, three rate hikes by the Bank of Japan have been accompanied by Bitcoin price drops of over 20%. The synchronized tightening by the Fed and BOJ worsens the global liquidity environment.

Japan’s rate hikes and Bitcoin declines

Geopolitical Risks
Finally, potential “black swan” geopolitical events continue to keep markets on edge. Trump’s series of actions in early 2026 have pushed this uncertainty to a new level.
Internationally, Trump’s government actions are unpredictable—from military interventions in Venezuela and unprecedented arrests of its president, to the risk of war with Iran; from attempting to buy Greenland to issuing new tariffs against the EU. These aggressive unilateral moves are intensifying major power conflicts.
Domestically, his actions have sparked deep concerns about constitutional crises. He proposed renaming the Department of Defense to the “Department of War” and ordered active-duty troops to prepare for potential domestic deployment.
These moves, combined with his hints of regret over not using military force to intervene and his reluctance to lose midterm elections, are fueling fears: will he refuse to accept defeat in the midterms and use force to stay in power? Such speculation and high pressure are exacerbating internal conflicts in the US, with protests spreading across various regions.

Last week, Trump invoked the Insurrection Act and deployed troops to Minnesota to quell protests. The Pentagon has also ordered about 1,500 active-duty soldiers in Alaska to standby.
This normalization of conflict is dragging the world into a “gray zone” between localized wars and a new Cold War. Traditional full-scale hot war still has a relatively clear path and market expectations, sometimes even accompanied by monetary easing to “rescue the market.”
However, these localized conflicts are highly uncertain, full of “unknown unknowns.” For venture markets that rely heavily on stable expectations, this uncertainty can be fatal. When large capital cannot predict future trends, the most rational choice is to hold cash and wait, rather than allocate funds into high-risk, highly volatile assets.

Why aren’t other assets falling?
Contrasting sharply with the silence in the crypto space, since 2025, markets like precious metals, US stocks, and A-shares have risen in turn. But these gains are not due to improved macro fundamentals or liquidity, rather they are driven by structural trends under the influence of sovereign will and industrial policies amid great power rivalries.
Gold’s rise reflects responses from sovereign nations to the existing international order, rooted in cracks in the dollar system’s credibility. The 2008 global financial crisis and the 2022 freezing of Russia’s foreign exchange reserves shattered the myth of the dollar and US Treasuries as risk-free ultimate reserves.
In this context, central banks worldwide have become “price-insensitive buyers.” They buy gold not for short-term profit but as an ultimate store of value independent of any sovereign credit.
Data from the World Gold Council shows that in 2022 and 2023, global central banks’ net gold purchases exceeded 1,000 tons for two consecutive years, setting a record. This gold rally is mainly driven by official sector activity, not market speculation.

Comparison of gold reserves and US Treasuries in central bank holdings, 2025: total gold reserves surpass US Treasuries.
Stock market gains are manifestations of national industrial policies. Whether it’s the US “AI National Strategy” or China’s “Industrial Autonomy” policy, these are driven by state power actively intervening and guiding capital flows.
In the US, the “Chips and Science Act” has elevated the AI industry to a strategic national security level. Funds are flowing out of large tech stocks and into more growth-oriented, policy-aligned small and medium-sized stocks.
In China’s A-share market, capital is also highly concentrated in sectors like “Xinchuang” (core infrastructure) and “Defense & Military Industry,” closely related to national security and industrial upgrading. This government-led trend has a valuation logic fundamentally different from Bitcoin, which relies purely on market liquidity.

Will history repeat?
Historically, Bitcoin has not been the first asset to diverge from others. Every time, it has ended with a strong rebound.
The RSI (Relative Strength Index) of Bitcoin relative to gold has fallen below 30—an extreme oversold condition—four times: in 2015, 2018, 2022, and 2025.
Each time Bitcoin was extremely undervalued relative to gold, it foreshadowed a rebound in the exchange rate or Bitcoin price.

Historical Bitcoin/Gold trend with RSI indicator below

In 2015, at the end of a bear market, Bitcoin’s RSI relative to gold fell below 30, leading to a super bull run in 2016-2017.
In 2018, during a bear market, Bitcoin dropped over 40%, while gold rose nearly 6%. After RSI fell below 30, Bitcoin rebounded from its 2020 lows by over 770%.
In 2022, during a bear market, Bitcoin fell nearly 60%. After RSI dropped below 30, Bitcoin rebounded again, outperforming gold.
Since late 2025, we are witnessing the fourth occurrence of this historic oversold signal. Gold surged 64% in 2025, and Bitcoin’s RSI relative to gold again entered the oversold zone.

Can we still chase other assets higher?
Amid the “ABC” hype, selling off crypto assets easily to chase what currently seem to be more prosperous markets could be a dangerous decision.
When US small-cap stocks start leading the rally, historically, it’s often the last exuberance before liquidity dries up at the end of a bull cycle. The Russell 2000 has gained over 45% since its 2025 lows, but most of its constituent stocks have weak profitability and are highly sensitive to interest rate changes. If the Fed’s monetary policy turns out to be less dovish than expected, these vulnerabilities will be exposed quickly.
Second, the frenzy around AI is showing typical bubble characteristics. Whether it’s Deutsche Bank’s survey or Ray Dalio’s warning, AI bubble risks are considered the biggest market threat in 2026.
Valuations of star companies like Nvidia and Palantir have reached historic highs, but whether their profit growth can sustain such valuations is increasingly questioned. Deeper risks include AI’s massive energy consumption potentially triggering new inflation pressures, forcing central banks to tighten monetary policy and bursting asset bubbles.
According to a January survey by Bank of America fund managers, global investor optimism has hit a new high since July 2021, with growth expectations soaring. Cash holdings have fallen to a record low of 3.2%, and hedging measures against market corrections are at their lowest since January 2018.
On one side, wildly rising sovereign assets and generally optimistic investor sentiment; on the other, escalating geopolitical conflicts.
In this context, Bitcoin’s “stagnation” is not simply “underperforming the market.” It’s more like a clear signal—an early warning of larger risks ahead, and a buildup for a broader narrative shift.
For true long-term believers, this is the moment to test their convictions, resist temptations, and prepare for upcoming crises and opportunities.