Gold surges while Bitcoin stalls, capital is quietly shifting!

Is this a warning sign in the bull market or a good opportunity to get on board?

As the US stock market quietly hits new all-time highs, Bitcoin has unexpectedly fallen behind. The market sentiment is subtly changing.

By the end of 2025, the financial markets are playing out an unprecedented divergence. The S&P 500 has risen a total of 16% this year, while Bitcoin has fallen 3%. This is the first time in 11 years that stocks are strengthening while Bitcoin weakens.

Even more surprisingly, as gold soars past $4100/oz, Bitcoin has been oscillating around $86,000, unable to break through the critical resistance level of $90,000. What market logic might be hidden behind this divergence?

01 Market Divergence, Capital is Quietly Moving

The current market landscape is confusing: US stocks continue to rise, gold surges, but Bitcoin remains stagnant. This triple divergence is rare in financial history.

Data shows that the correlation between Bitcoin and the S&P 500 has dropped to a three-year low. This “decoupling” is not accidental but driven by deep market logic.

On one hand, AI concept stocks have surged, pushing the Nasdaq higher, and corporate capital expenditures have skyrocketed, causing funds to flow back into equities; on the other hand, the US dollar index has plummeted below 98 this year, coupled with uncertainties around the US economy’s “stagflation,” prompting institutional investors to seek “alternative routes.”

Gold has become the biggest winner in this wave. Since 2025, gold has surged over 65%. Even after a sharp correction in late October, London spot gold remains above $4100/oz. This performance makes all risk assets look pale in comparison.

02 Why is Bitcoin Being Neglected?

Faced with gold’s strong performance, why does Bitcoin appear weak? I believe there are three main reasons:

Adjustment in institutional capital allocation. When market uncertainty increases, large funds prioritize traditional safe-haven assets. According to IMF data, global gold reserves increased by 415 tons in the first half of the year, with China’s central bank adding gold for 10 consecutive months. This allocation demand is unlikely to shift to Bitcoin in the short term.

Bitcoin’s momentum dependence. Miller Tabak’s chief market strategist Matt Maley pointed out: “Bitcoin is essentially a momentum-dependent asset. But this year, precious metals have absorbed a large portion of the momentum funds that might have flowed into Bitcoin.”

Market leverage de-leveraging. In recent weeks, inflows into crypto ETFs have decreased, and the de-leveraging in derivatives markets is evident. The market is currently in a prolonged consolidation phase under high selling pressure, needing time to digest previous gains.

03 The Deep Logic Behind the Gold Surge

Gold’s rise is no coincidence; it is built on three solid foundations:
Global central banks are strategically increasing gold holdings. IMF data shows that the share of global gold reserves in foreign exchange reserves has risen from 24% in December 2024 to 29% in June 2025, while US dollar reserves have decreased from 54% to 52%. This trend is structural, not short-term volatility.

The US dollar’s credit system faces a trust crisis. The US federal debt is enormous, and fiscal sustainability is challenged, weakening market confidence in dollar assets. More countries are diversifying their reserve assets, with gold being the top choice.

Geopolitical risks continue to ferment. The US government shutdown has lasted 23 days, and if it extends beyond November 4, it will be the longest in history. This uncertainty further reinforces gold’s safe-haven attributes.

04 Bitcoin and Gold: Not Substitutes but Complements

Some believe Bitcoin is “digital gold” and will replace traditional gold. But I think these two assets are forming a complementary rather than substitutive relationship.

Bitcoin is no longer purely a speculative asset; large corporate treasuries are increasing holdings, with companies like MicroStrategy treating it as a long-term asset. After ETF institutionalization, capital flow has shifted from retail-led to institution-driven. It is transforming into a “growth-oriented safe-haven asset” with both inflation resistance and capital appreciation potential.

Gold, on the other hand, maintains its status as the “ultimate safe-haven” asset, with an annual volatility below 20%, serving as a ballast in central bank reserves.

The modern market has entered an era of “multi-polar safe-havens.” Investors no longer rely on a single asset to hedge risks but dynamically allocate among gold, Bitcoin, and even some stablecoins. When sovereign credit is under pressure, both tend to rise together; during short-term sentiment corrections, capital flows between them.

05 My Investment Strategy and Recommendations

In the face of the current complex market, my personal approach is: stay calm, allocate in phases, and maintain dynamic balance.

In the short term, Bitcoin may continue to oscillate between $85,000 and $88,000. The market is waiting for a real breakout point. Before new liquidity injections, prices are likely to remain in consolidation. The key support level is around $81,000; a break below warrants caution for a deep correction.

In the medium to long term, I remain optimistic about Bitcoin. Grayscale’s outlook for 2026 explicitly mentions “the dawn of the institutional era,” believing that improved regulation, ETF inflows, stablecoins, and asset tokenization will be the core drivers pushing Bitcoin to new highs.

My specific suggestions are:

1. Allocate 5-10% of your portfolio to gold as a basic safe-haven asset;
2. Maintain a dollar-cost averaging strategy for Bitcoin, using volatility to average down rather than a one-time heavy position;
3. Pay attention to Federal Reserve policy developments, especially after the new chair is appointed;
4. Be patient; the market needs time to digest consensus and rebuild confidence.

Markets always swing between fear and greed. Currently, gold is in favor, and Bitcoin is temporarily neglected, but this does not mean a change in the long-term trend. True investment opportunities often arise during market divergence, not in the most 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 divergence may be providing us with a chance to calmly reassess asset allocation.