While the whole world is celebrating, why is the cryptocurrency world the only one experiencing a "winter"?

Written by: EeeVee

"As long as you don't invest in crypto, you can make money from everything else."

The cryptocurrency market and other global markets seem to be experiencing starkly contrasting fortunes lately.

Throughout 2025, gold rose by over 60%, silver surged by 210.9%, and the Russell 2000 index in the US stock market rose by 12.8%. Bitcoin, however, after briefly reaching a new high, closed lower for the year.

As 2026 begins, the divergence continues to widen. On January 20th, gold and silver both hit new highs, the US Russell 2000 index outperformed the S&P 500 for the 11th consecutive day, and the A-share STAR Market 50 index rose by more than 15% in a single month.

In contrast, Bitcoin experienced its sixth consecutive day of decline on January 21, falling from $98,000 back below $90,000 without looking back.

Silver's performance over the past year

After 1011, funds seem to have decisively left the crypto market, and BTC has been fluctuating below $100,000 for more than three months, with the market entering a period of "the lowest volatility in history".

Disappointment is spreading among cryptocurrency investors. When asked about their success in making money in other markets after leaving Crypto, some even shared the "ABC" secret: "Anything But Crypto." They claimed that as long as you don't invest in Crypto, you can make money in everything else.

The "Mass Adoption" that everyone was looking forward to in the last round has indeed arrived. However, instead of the widespread adoption of decentralized applications that everyone expected, it is a complete "assetization" led by Wall Street.

This round of embrace of crypto by the US establishment and Wall Street is unprecedented. The SEC approved spot ETFs; BlackRock and JPMorgan Chase have allocated assets to Ethereum; the US has included Bitcoin in its national strategic reserve; pension funds in several states have invested in Bitcoin; and even the NYSE has announced plans to launch a cryptocurrency trading platform.

So here's the question: why is Bitcoin's price performance so disappointing when precious metals and the stock market are hitting record highs, despite receiving so much political and capital backing?

When cryptocurrency investors have become accustomed to looking at pre-market US stock prices to judge the rise and fall of the cryptocurrency market, why isn't Bitcoin following suit?

Why is Bitcoin so weak?

Leading indicators

Bitcoin is a "leading indicator" of global risk assets. Raoul Pal, the founder of Real Vision, has repeatedly mentioned this in many of his articles. Because Bitcoin's price is purely driven by global liquidity and is not directly affected by any country's financial reports or interest rates, its volatility often leads that of mainstream risk assets such as the Nasdaq index.

According to data from MacroMicro, Bitcoin's price turning points have repeatedly preceded those of the S&P 500 index over the past few years. Therefore, once Bitcoin's upward momentum, as a leading indicator, stalls and fails to reach new highs, it constitutes a strong warning signal that the upward momentum of other assets may also be nearing exhaustion.

Liquidity Tightening

Secondly, the price of Bitcoin, to this day, 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 record high in 2025 was largely driven by new funds brought in by ETFs, but this did not change the fundamental situation of tight global macro liquidity. Bitcoin's sideways movement is a direct reflection of this macroeconomic reality. In an environment of limited liquidity, it is difficult for it to initiate a super bull market.

Meanwhile, the yen, the world's second-largest source of liquidity, is also tightening. The Bank of Japan plans to raise its short-term policy rate to 0.75% in December 2025, the highest level in nearly 30 years. This directly impacts yen carry trades, a crucial source of funding for global risk assets over the past few decades.

Historical data shows that since 2024, each of the Bank of Japan's three interest rate hikes has been accompanied by a Bitcoin price drop of over 20%. The synchronized tightening by the Federal Reserve and the Bank of Japan has further exacerbated the global liquidity crisis.

The drop in cryptocurrency prices with each interest rate hike in Japan

Geopolitical conflict

Finally, the potential "black swan" events in geopolitics are keeping markets on edge, and Trump's series of domestic and foreign actions in early 2026 will push this uncertainty to new heights.

Internationally, the Trump administration's actions have been highly unpredictable. From military intervention in Venezuela and the arrest of its president (unprecedented in the history of modern international relations), to the brink of war with Iran again; from attempting to forcibly purchase Greenland to issuing new tariff threats against the European Union, this series of radical unilateralist actions is comprehensively exacerbating tensions between major powers.

Domestically, his actions have sparked deep concerns about a constitutional crisis. He not only proposed renaming the "Department of Defense" to the "War Department," but has also ordered active duty troops to prepare for potential domestic deployments.

These actions, combined with his previous remarks suggesting regret for not using the military to intervene and his unwillingness to lose the midterm elections, have made public concerns increasingly clear: Will he refuse to accept defeat in the midterm elections and use force to win re-election? This speculation and pressure are already exacerbating internal conflicts in the United States, and there are signs that protests in various places are expanding.

Trump invoked the Insurrection Act last week and deployed troops to Minnesota to quell protests; subsequently, the Pentagon ordered approximately 1,500 active-duty soldiers stationed in Alaska to stand by.

The normalization of this conflict is dragging the world into a "gray zone" between local wars and a new Cold War. Traditional full-scale hot wars have relatively clear paths, market expectations, and have even been accompanied by monetary easing to "rescue" the market.

Such localized conflicts are highly uncertain, filled with "unknown unknowns." For risk capital markets that heavily rely on stable expectations, this uncertainty is fatal. When large capital cannot predict future trends, the most rational choice is to increase cash holdings and stay out of the market, rather than allocating funds to high-risk, high-volatility assets.

Why aren't other assets falling?

In stark contrast to the sluggish cryptocurrency market, since 2025, precious metals, US stocks, and A-shares have all seen successive rallies. However, these market rallies are not due to a general improvement in macroeconomic and liquidity fundamentals, but rather a structural market driven by sovereign will and industrial policies against the backdrop of great power rivalry.

The rise in gold prices reflects sovereign states' reaction to the existing international order, rooted in the cracks in the credibility of the dollar system. The 2008 global financial crisis and the 2022 freeze on Russia's foreign exchange reserves shattered the myth of the "risk-free" nature of the dollar and US Treasury bonds as the ultimate global reserve assets. Against this backdrop, global central banks have become "price-insensitive buyers." They buy gold not for short-term profits, but to find an ultimate store of value that does not rely on the credit of any single sovereign entity.

Data from the World Gold Council shows that global central banks' net gold purchases exceeded 1,000 tons for two consecutive years in 2022 and 2023, setting a new historical record. This round of gold price increases was primarily driven by official forces, rather than market-driven speculation.

A comparison of the proportion of gold in sovereign central bank reserves to US Treasury bonds shows that by 2025, total gold reserves will exceed those of US Treasury bonds.

The rise in the stock market reflects national industrial policies. Whether it's the US's "AI nationalization" strategy or China's "industrial self-reliance" policy, both involve the state's deep involvement and control over the flow of capital.

In the United States, for example, the "Chip and Science Act" has elevated the artificial intelligence industry to a strategic level of national security. Funds are clearly flowing out of large-cap tech stocks and into smaller, more growth-oriented stocks that align with policy direction.

In China's A-share market, funds are also highly concentrated in sectors closely related to national security and industrial upgrading, such as "information technology innovation" and "defense and military industry." This market trend, strongly driven by the government, has a pricing logic that is inherently different from Bitcoin, which relies on purely market-based liquidity.

Will history repeat itself?

Historically, this isn't the first time Bitcoin has diverged from other assets. And each time, this divergence has ultimately ended with a strong rebound in Bitcoin's performance.

Historically, there have been four instances where Bitcoin's RSI (Relative Strength Index) relative to gold fell below 30, indicating extreme oversold conditions: in 2015, 2018, 2022, and 2025.

Every time Bitcoin is severely undervalued relative to gold, it foreshadows a rebound in the exchange rate or the price of Bitcoin.

Historical price movements of Bitcoin/Gold, with the RSI indicator below.

In 2015, at the end of the bear market, Bitcoin's RSI relative to gold fell below 30, which then triggered the super bull market of 2016-2017.

In 2018, during the bear market, Bitcoin fell by more than 40%, while gold rose by nearly 6%. After the RSI fell below 30, Bitcoin rebounded by more than 770% from its 2020 low.

In 2022, during the bear market, Bitcoin fell by nearly 60%. After the RSI fell below 30, Bitcoin rebounded and once again outperformed gold.

Since the end of 2025, we have witnessed this historic oversold signal for the fourth time. Gold surged 64% in 2025, while Bitcoin's RSI relative to gold has once again fallen into oversold territory.

Is it still advisable to chase after other assets now?

Amid the clamor surrounding "ABC" (Alibaba, Tencent, and ABC), readily selling off crypto assets to chase after other markets that currently appear more prosperous could be a dangerous decision.

Historically, when small-cap stocks in the US market begin to lead the rally, it often marks the final spree before a liquidity crunch at the end of a bull market. The Russell 2000 index has risen over 45% since its 2025 low, but most of its constituent stocks have relatively poor profitability and are highly sensitive to interest rate changes. If the Federal Reserve's monetary policy falls short of expectations, these companies' vulnerabilities will be immediately exposed.

Secondly, the AI sector's frenzy exhibits typical bubble characteristics. Both Deutsche Bank's survey and Bridgewater Associates founder Ray Dalio's warnings list the AI bubble as the biggest risk to the market in 2026.

Valuations of star companies like Nvidia and Palantir have reached historical highs, and there is growing skepticism about whether their profit growth can support such high valuations. A deeper risk lies in the fact that the enormous energy consumption of AI could trigger a new round of inflationary pressures, forcing central banks to tighten monetary policy and burst asset bubbles.

According to a Bank of America fund manager survey in January, global investor optimism is currently at its highest level since July 2021, with global growth expectations surging. Cash holdings have fallen to a record low of 3.2%, and protection against market corrections is at its lowest level since January 2018.

On one hand, there are soaring sovereign assets and generally optimistic investor sentiment; on the other hand, there are escalating geopolitical conflicts.

Against this backdrop, Bitcoin's "stagnation" is not as simple as "underperforming the market." It is more like a sobering signal, an early warning of greater risks in the future, and a way of building momentum for a grander narrative shift.

For true long-term thinkers, this is precisely the time to test their beliefs, resist temptations, and prepare for the coming crises and opportunities.