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\n\t\t\t\t\t\t\t\t\tAnalysts have said that currently, stocks and Bitcoin are being driven by entirely different market forces.\t\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n
Global stocks have been making new highs recently, but Bitcoin (BTC), the biggest cryptocurrency based on market capitalization, is trading at almost 42% below its lifetime highs.<\/p>\n
This split has left crypto investors searching for answers, especially since the market has lumped the two asset classes together under the \u201crisk-on\u201d label.<\/p>\n
According to market researchers at XWIN Japan, the reason<\/a> for the divergence is simple: stocks and BTC are running on \u201cdifferent engines.\u201d<\/p>\n They noted that equity gains are tied to growth in AI-linked earnings, capital spending from firms like Nvidia, and share buybacks, as well as steady ETF inflows. As such, investors can point to profit growth that is real and visible.<\/p>\n However, Bitcoin does not carry earnings or cash flow, with its price depending on new capital entering the market, which leaves it more exposed to liquidity shifts.<\/p>\n Right now, per XWIN\u2019s assessment, that capital isn\u2019t arriving. Recall that spot Bitcoin ETFs have recorded<\/a> notable outflows during the second half of May, with data from SoSoValue showing that since May 15, the funds have lost more than $3.5 billion. In that time, the biggest outflows were recorded on May 18 ($648.64 million) and May 27 ($733.43 million). There hasn\u2019t been a single green day since the $131.31 million that flowed in on May 14.<\/p>\n XWIN\u2019s analysts also pointed out that in past strong cycles, the price of Bitcoin was often backed by growing user activity. But currently, the asset is increasingly resembling a market where price is elevated while participation is fading. And that, they said, is the key difference.<\/p>\n \u201cStocks rise because companies generate profits. Bitcoin rises when new liquidity and new participants return,\u201d they explained.<\/p>\n<\/blockquote>\n As a result of the above, investors have been allocating more funds to stocks, which they see as \u201cprofit growth assets,\u201d while taking away from those that depend on liquidity, including BTC.<\/p>\n And it\u2019s not all talk. As noted<\/a> by analyst Ash Crypto earlier today, the Nikkei crossed 66,500 for the first time ever on May 29, with Japanese stocks adding about $3.2 trillion this year alone. The story was the same in Korea, whose KOSPI also hit<\/a> a new all-time high, adding 150 trillion won to its total market value.<\/p>\n As the Nikkei and KOSPI shone, Bitcoin yesterday crashed<\/a> to about $72,600 per CoinGecko data, with market watchers suggesting<\/a> it may have been affected by the resumption in hostilities between the USA and Iran, as well as someone offloading a huge $1.3 billion position in BlackRock\u2019s spot Bitcoin ETF, IBIT.<\/p>\n The flagship crypto has since dragged itself back above $73,000, but that\u2019s hardly impressive, considering that it had been trading close to $78,000 at some point in the last seven days. The current price also represents a drop of more than 4% in the past month, as well as a nearly 32% decline year-on-year.<\/p>\n To turn things around, XWIN\u2019s analysts stated that Bitcoin needs stronger ETF flows, a rise in its on-chain activity, and improvement in the Coinbase Premium. They also believe that a weaker dollar could help bring about a more sustained revival for the cryptocurrency.<\/p>\n LIMITED OFFER for CryptoPotato readers at Bybit: Use this link<\/a> to register and open a $500 FREE position on any coin!<\/b><\/p>\n<\/div>\n<\/div>\nYou may also like:<\/h3>\n
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