Bitcoin rebounded to around $66,000 after reclaiming the $66,000 level. Over the past six months, while gold and stocks rose, Bitcoin fell sharply, a decoupling that analysts say could signal substantial upside potential in the medium to long term. Santiment noted that Bitcoin’s weakness relative to gold and stocks widened unusually, and such a divergence is unlikely to persist over the long term. Bitcoin was trading at $66,455 as of 11:10 p.m. local time on the 25th.
Santiment said that after August, gold had risen 51% and the S&P 500 had gained 7%, while Bitcoin fell 43%. The current daily correlation between Bitcoin and the S&P 500 is 0.32, while the correlation with gold stands at -0.45. Santiment argued that when normally correlated assets diverge to an extreme, the gap does not persist indefinitely, and this abnormal split points to substantial upside for Bitcoin and other cryptocurrencies in the long term. It also noted that Bitcoin maintains its inflation-hedging characteristics and is gradually becoming usable collateral in the institutional market.
Bitcoin’s spot ETFs posted inflows of $258 million, signaling renewed investor interest. Darius Sit, founder of QCP Capital, cautioned that a simple price comparison with gold can obscure the underlying dynamics and attributed the gap to liquidity factors such as position liquidations and deleveraging rather than a narrative collapse. He added that Bitcoin is likely to maintain its inflation-hedging character and gradually become usable collateral in the institutional market.
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