What conditions does Bitcoin need to rise?

Last night, NVIDIA delivered a stunning report card.

In the third quarter, revenue reached $57 billion, soaring 62% year-over-year, and net profit skyrocketed 65% to $31.9 billion. This marks NVIDIA's twelfth consecutive earnings surprise. After the earnings report was released, the stock price surged 4-6% in after-hours trading, and continued to rise 5.1% in pre-market trading the next day, adding approximately $22 billion to the company's market value and also boosting Nasdaq futures by 1.5-2%.

Logically, with such positive market sentiment, Bitcoin, the digital gold, should also benefit, right? However, reality slapped us in the face—Bitcoin not only failed to rise but instead fell, with the price sliding to $91,363, a drop of about 3%.

NVIDIA Soars, But Bitcoin Falls?

Investors who once viewed Bitcoin as a safe haven are likely feeling uneasy now.

Initially packaged as a "tool against inflation" and a "safe haven during economic anxiety," its current performance resembles that of a high-risk tech stock rather than a safe-haven asset like physical gold.

The data is even more straightforward: after plummeting 26% from its historical high in early October, Bitcoin's price has essentially returned to the level it was at the beginning of the year. In other words, this entire year has been a wasted effort.

Meanwhile, what about real gold? It has surged 55% in 2025. The psychological gap for Bitcoin holders is indeed significant.

The factors driving gold prices up are quite clear: potential interest rate cuts, a weakening dollar, increased market volatility, and an uncertain economic outlook. According to traditional Bitcoin logic, these conditions should also push Bitcoin prices higher. But the reality is quite the opposite.

CME economist Mark Shore pointed out back in May that since 2020, Bitcoin and U.S. stocks have had a positive correlation, which has persisted to this day. More critically, the amount of Bitcoin flowing into institutional investors through ETFs and publicly listed cryptocurrency companies has reached an all-time high over the past year.

In other words, Bitcoin is becoming increasingly "mainstream," but the cost is that it is also resembling a traditional risk asset more and more.

Of course, the reason for "NVIDIA soaring while Bitcoin falls" also lies in the flow of funds.

NVIDIA benefits from the certainty of demand in the AI sector. CEO Jensen Huang emphasized that "computational demand continues to accelerate," and the newly launched Blackwell chips are selling "off the charts," with $500 billion in order visibility directly alleviating market concerns about an AI bubble. Major cloud service providers, such as Amazon and Microsoft, have exceeded $380 billion in capital expenditures this year, with most of that money flowing to NVIDIA.

And what about Bitcoin? It is bearing the brunt of a widespread risk-averse sentiment. As a "high Beta risk asset," it is the first to suffer in a tightening liquidity environment. In just one week, it dropped 12.5%. On November 13, cryptocurrency ETFs saw a net outflow of $867 million in a single day, with long-term holders starting to sell off, and the supply of dormant Bitcoin fell from 8 million at the beginning of the year to 7.32 million.

So what conditions does Bitcoin need to rise?

Although the current situation is not optimistic, there are still potential turning points. For Bitcoin to take off again, several key conditions may need to be met simultaneously.

Liquidity Injection After the U.S. Government Reopens

The 43-day government shutdown officially ended on November 18. This shutdown affected 1.25 million federal employees and resulted in approximately $16 billion in lost wages, causing consumer confidence to drop to a three-year low of 50.4.

Now that the government has reopened, liquidity injection has become crucial.

Here’s a concept to clarify—TGA (Treasury General Account), which is the U.S. Treasury's main operating account at the Federal Reserve. All government revenues and expenditures flow through this account. When TGA increases, it indicates that funds are flowing from the market to the government, reducing market liquidity; conversely, when TGA decreases, government spending injects funds into the market, increasing liquidity.

Data shows that from October 1 to November 12, 2025, during these 43 days, the TGA balance continued to accumulate, reaching a peak of $959 billion on November 14. This level is far above the cash position typically maintained by the Treasury, primarily due to limited spending during the government shutdown and ongoing debt issuance, resulting in a significant accumulation of cash in the Treasury account.

Currently, TGA data does not show a significant decline.

Based on the timeline of the government reopening on November 13, and referencing historical experience, it is expected that in the first week, government employees will first receive back pay, injecting about $16 billion into the economy, which will have a relatively small impact. That means before November 20, it will be difficult to see a large influx of liquidity.

In another 1-2 weeks, around early December, as TGA normalizes operations, daily government spending resumes, and tax revenues seasonally flow back, the TGA balance will begin to fluctuate significantly and release liquidity, allowing the market to start feeling a noticeable improvement in liquidity.

Increased interbank liquidity and ample institutional funds would also mean that Bitcoin, as a risk asset, would receive inflows and experience a rise.

The experience from early 2019 provides an important reference. At that time, the U.S. government also experienced a long shutdown, lasting from December 22, 2018, to January 25, 2019, for a total of 35 days. During the shutdown, the TGA balance also significantly accumulated, reaching $413 billion on January 29, 2019. After the government resumed operations, the Treasury quickly increased spending, and in just one month from January 29 to March 1, the TGA balance decreased by $211 billion, injecting those funds into the financial system and bringing significant liquidity improvement. This drove the stock market and Bitcoin to rise 8.5% and 35%, respectively, within 30 days after reopening.

Comparing the current situation, the TGA balance in November 2025 reached $959 billion, far exceeding the $413 billion in 2019, indicating a potentially more substantial liquidity release.

Federal Reserve Policy Shift

Speaking of the Federal Reserve, this is another major factor influencing Bitcoin's trajectory.

The latest Federal Reserve meeting minutes show that officials have serious disagreements about whether a third consecutive rate cut is necessary. Most officials believe that further rate cuts could exacerbate inflation risks. White House economic advisor Kevin Hassett even admitted that "we have lost control of inflation."

Trump has once again expressed his "incompetent rage," directly attacking Federal Reserve Chairman Powell, saying he "would love to fire him; he is extremely incompetent."

According to CME's "FedWatch," the probability of a 25 basis point rate cut in December is only 36.2%, while the probability of maintaining rates is as high as 63.8%.

Worse yet, the U.S. Bureau of Labor Statistics has confirmed that the household data for October (used to calculate unemployment rates and other key statistics) cannot be collected retroactively, so it will not release the October employment report, incorporating these non-farm employment data into the November report, which will be released on December 16. This means the Federal Reserve will not have access to critical employment data at its last meeting of the year.

Additionally, with U.S. Treasury yields rising, yields on major maturities have generally increased, with the 10-year yield rising by 2.5 basis points. Market expectations for a December rate cut have essentially evaporated, with the probability of a cut dropping to around 31%.

However, if we broaden our perspective, the situation may not be as bleak. The delayed November employment data will be released on December 16, and if the data is weak, it could still support expectations for the next round of rate cuts, likely around January 27 next year. Currently, the probability of a rate cut is 48%, the highest for the 2026 meetings.

Furthermore, while the Federal Reserve's stance is ambiguous, other major central banks around the world have already taken action. This undercurrent could become an important driving force for Bitcoin's rise.

For instance, the European Central Bank is currently maintaining its deposit facility rate at 2.00%, but there is a strong possibility of a 25 basis point rate cut in December, as inflation has fallen to 2.1%, close to the target level. There is an interesting statistic here: historically, the correlation between ECB rate cuts and Bitcoin price increases is as high as 0.85. Why? Because liquidity easing in the Eurozone spills over into global markets, enhancing overall risk appetite.

Economic Improvement

The current U.S. economy presents a very subtle state—there are both bright spots and hidden worries.

In August, the trade deficit narrowed significantly, dropping 23.8% to $59.6 billion, exceeding market expectations of $61 billion. This was mainly due to a 6.6% decrease in goods imports under the tariff effect. This change is expected to contribute 1.5-2.0 percentage points to third-quarter GDP growth, raising growth estimates to 3.8%. Sounds good, right? But the problem is that this improvement comes at the cost of reduced imports, which may affect supply chains and consumption in the long run.

Although the 43-day government shutdown has ended, the damage it caused continues. The $16 billion in lost wages, the consumer confidence index dropping to a three-year low of 50.4, and the CBO estimating a 1.5 percentage point loss in fourth-quarter GDP—these numbers reflect real economic pain.

Food inflation is also critical; what used to cost $100 now costs $250, and the quality has worsened. The egg price surge has just eased, but Americans' favorite beef is facing new inflation.

The latest Consumer Price Index (CPI) released on October 24 shows that the prices of roasted beef and steaks have risen by 18.4% and 16.6% year-over-year, respectively. According to the U.S. Department of Agriculture, the retail price of ground beef has skyrocketed to $6.1 per pound, setting a new historical high. Compared to three years ago, beef prices have cumulatively risen by over 50%.

Additionally, coffee prices have risen by 18.9%, natural gas prices by 11.7%, electricity by 5.1%, and auto repair costs by 11.5%. Many young Americans burdened with student debt are feeling even more pressure due to rising living costs.

The "warning signals of a K-shaped economy" may be the most concerning trend in the current U.S. economic situation. Nearly 25% of American households are living paycheck to paycheck, with low-income groups experiencing stagnant wage growth, while high-income groups (which account for 50% of consumption) continue to benefit from AI investments. The risk of economic polarization is sharply rising.

Moreover, tariff policies continue to drag down global export economies, with Japan, Switzerland, and Mexico all experiencing contractions in the third quarter. This chain reaction in the global economy will eventually return to the U.S. market, affecting investors' risk appetite.

However, if the U.S. government can improve the economy, various assets, including Bitcoin, will have the opportunity to rise.

Institutional Fund Inflows

If the previous conditions are the "timing," then institutional funds represent the "people." This could be the most direct and immediate catalyst.

I must say, the current data does not look good. From November 13 to 19, ETFs saw a net outflow of $2 billion (about 20,000 Bitcoins), the largest weekly outflow since February of this year. The current assets under management (AUM) stand at $122.3 billion, accounting for 6.6% of Bitcoin's total market value.

What does this mean? Institutional investors are retreating, and at a rapid pace.

After all, in the current macro environment, institutional funds are also facing multiple pressures: first, there is a severe liquidity stratification. The tech/AI sector is receiving ample funding, traditional safe-haven assets like gold are performing strongly, while the liquidity of purely risk assets like cryptocurrencies is drying up. The money hasn’t disappeared; it has just gone elsewhere.

Moreover, the typical behavior patterns of institutional investors and fund managers are often shaped by an "avoid mistakes" incentive structure. The internal evaluation system in the industry focuses more on "not falling behind peers" rather than "achieving excess returns." Within this framework, taking risks that contradict mainstream views often comes at a cost far exceeding potential rewards.

Thus, most managers tend to maintain a position structure consistent with mainstream market allocations. For example, if Bitcoin is experiencing an overall pullback, and a fund manager maintains a significant long position, their drawdown will be interpreted as a "judgment error," leading to criticism far outweighing the recognition from equivalent gains. Ultimately, under such institutional constraints, "conservatism" becomes a rational choice.

However, history tells us that the flow of institutional funds often reverses suddenly at a critical point. So where is this critical point? There are three clear signals:

Signal 1: Three Consecutive Days of Net Inflows

This is the most important signal. Historical data shows that when ETF fund flows turn positive and maintain net inflows for three consecutive days, Bitcoin tends to rise 60-70% within an average of 60-100 days.

Why is this so magical? Because institutional investment is the area where the "herd effect" is most pronounced. Once the trend reverses, subsequent funds will follow like a domino effect. The rally at the beginning of 2024 started in this way.

Signal 2: Single-Day Inflows Exceeding $500 Million

This represents a signal for large institutions to enter the market. In October 2024, a single week saw inflows of $3.24 billion, directly pushing Bitcoin to break its historical high. Such momentum is something retail investors simply cannot achieve.

What does a single-day inflow of $500 million mean? It is equivalent to giants like BlackRock and Fidelity simultaneously deciding to increase their positions. This level of capital entering the market is often accompanied by clear macro judgments—they see signals that ordinary investors cannot.

Signal 3: AUM Proportion Rebounding to Above 8%

Currently, the $122.3 billion AUM accounts for 6.6% of Bitcoin's market value, which is relatively low historically. During the peak periods of 2024, this ratio reached 8-9%. When this proportion begins to rebound, it indicates that institutions are not only buying Bitcoin but are doing so at a pace that exceeds the rate of Bitcoin price increases.

So under what circumstances will institutional funds flow back?

Basically, it’s as mentioned earlier: clear signals of Federal Reserve rate cuts; clarification of U.S. economic data; coordinated easing from global central banks creating resonance; breakthrough of key resistance levels in technical analysis, etc.

Possible Time Points for Price Increases

After discussing so many conditions, what everyone may be most concerned about is: when will it rise?

Although no one can accurately predict the market, we can identify several key nodes based on the timeline of macro events.

December 10: FOMC Meeting

This is the last Federal Reserve meeting of the year and the most anticipated event in the market.

If a rate cut occurs, Bitcoin may experience a surge; if not, it may drop again.

Here’s a key point: even if there is no rate cut, if the Fed releases dovish signals (such as emphasizing "maintaining flexibility" or "closely monitoring employment data"), it will also support market sentiment. Conversely, if there is no rate cut and the stance is hawkish, then be prepared for short-term pressure.

December 16: Delayed November Employment Data

This data will include the complete situation for October and November and will confirm the real trends in the labor market.

If the data for two consecutive months is weak, the probability of a rate cut in early 2026 will significantly increase. This would provide mid-term support for Bitcoin. If the data is chaotic or contradictory, the market may continue to be entangled, and the range-bound pattern will persist.

The certainty of data release is high, but the quality of the data itself may be unreliable (due to the government shutdown causing statistical chaos), so market reactions may be more based on interpretations rather than the data itself.

Late December to Year-End: The "Traditional Peak Season" for Liquidity

This is an interesting seasonal pattern. Historically, from late December to the New Year, institutional investors conduct year-end rebalancing, and the reduced trading volume during the holidays amplifies price volatility.

If the earlier events create a favorable combination, there may be a "Christmas rally" at the end of the year. However, be wary of the "sell the news" effect—profit-taking after good news materializes.

First Quarter of 2026: The "Grand Strategy" of Global Liquidity Easing

This is the time window with the most imaginative potential.

If the Federal Reserve cuts rates in December or January, and the ECB and the People's Bank of China continue to maintain easing, a scenario of synchronized global liquidity improvement will form. In this case, Bitcoin may experience a rally reminiscent of 2020—when it surged from a low of $3,800 in March to $28,000 by the end of the year, an increase of over 600%.

Of course, it is unlikely that 2026 will completely replicate 2020 (when the pandemic stimulus was unprecedented), but a combination of coordinated global central bank easing, TGA fund releases, and institutional fund inflows could drive a significant market rally.

The likelihood of synchronized global liquidity easing is moderately high (60-65%). Central banks worldwide are facing pressures from economic slowdowns, making easing a high-probability event.

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