Wintermute: The BTC trading trend is more bearish than the stock index, and the upward narrative premium is no longer present

Wintermute's latest report indicates that the correlation between Bitcoin and the Nasdaq index remains as high as 0.8, but Bitcoin's trading trend is more bearish than the stock index, with a reaction to market pessimism far greater than to optimism. On days when the stock market declines, BTC typically experiences larger drops than the stock index, while on days when the stock market rises, Bitcoin's gains are smaller. This pattern was last seen during the bear market of 2022. Wintermute suggests that the potential factors leading to this phenomenon are mainly two:

For most of 2025, funds that typically flow into the cryptocurrency space (including new token issuance, infrastructure upgrades, and retail participation) have shifted to the stock market. Large-cap tech companies have become the focus for institutions and retail investors seeking high beta/high growth. When global risk sentiment shifts, Bitcoin remains correlated, but when optimism returns, it fails to benefit proportionally. It acts more like a "high beta tail" of macro risks rather than an independent narrative; the downside beta effect still exists, but the upside narrative premium is no longer present.

The current liquidity situation in cryptocurrencies is different from previous risk cycles. The issuance of stablecoins has stabilized, ETF inflows have slowed, and the market depth of trading platforms has not yet recovered to the levels seen in early 2024. This fragility amplifies negative reactions during stock market pullbacks. The result is that Bitcoin's participation in declines remains higher than in rises, exacerbating this performance deviation.