Macro asset prices are exhibiting a notable divergence. The S&P 500 index has climbed 3.12% this month, pushing the associated market's value up by approximately $2.1 trillion to a new record of $70.5 trillion, with the index itself reaching 7,723 points. In contrast, Bitcoin has only managed a 2% gain, hovering around the $64,600 mark and failing to follow the upward trajectory of traditional financial markets.
The core reason for this divergence lies in a mismatch of driving factors. The strong performance of the Nasdaq and Dow Jones indices is primarily fueled by specific developments in the artificial intelligence and semiconductor sectors, rather than a broad-based recovery in macro risk appetite. Adam Hames, head of asset management at TesseractGroup, points out that the stock market rally originates from areas like AI and semiconductors, which are difficult for Bitcoin to directly influence. Although falling oil prices and the resumption of transport through the Strait of Hormuz (previously disrupted by the Iran conflict) are positive for risk assets, their boost to the stock market is quickly reflected through lower corporate costs. The impact on Bitcoin, however, must be transmitted via inflation expectations and Federal Reserve policy, a process with a lag that makes the September outlook unclear.
Paul Howard, senior director at market maker Wincent, adds that capital is not necessarily flowing into the crypto market. This market is seeking a growth driver independent of U.S. stocks, which could potentially emerge in the fourth quarter, provided regulatory policies become clear and the stablecoin market continues to develop. The cryptocurrency sector also faces multiple internal pressures that limit its upside. Data compiled by WoofunAI shows that a $120 million exploit related to a Coldcard vulnerability has damaged market sentiment. Uncertainty from the Clarity Bill, along with MicroStrategy (MSTR.US) selling Bitcoin for three consecutive months, constitutes bearish factors, even if it hasn't triggered a widespread credit crisis. Furthermore, rising bond yields are prompting capital outflows via stablecoins, with the supply of USDT falling from approximately $190 billion in April to $183 billion, and USDC dropping from $79.5 billion to $72 billion. With U.S. Treasury real yields at their highest levels since 2008, capital is more inclined to stay within the traditional financial sector.
Psychological dynamics and institutional behavior are further entrenching the market stalemate. Marcus Thielen, founder of 10xResearch, believes that the market's self-fulfilling prophecy regarding the four-year "halving cycle" is causing traders to wait on the sidelines. There is a widespread expectation that the bottom will appear in early October, a contrast to last October when the theory was disproven. Thielen notes that traders are overlooking the bullish signals from the Fed's dovish stance. Meanwhile, SoSoValue data indicates that U.S.-listed ETFs saw capital outflows of $61.53 million this week, breaking a three-week streak of inflows. Although the week attracted $626 million in capital, the highest since early May, Vikram Subburaj, CEO of Giottus.com, emphasizes that several consecutive days of inflows are needed to confirm a recovery in demand. He predicts Bitcoin will find support between $63,000 and $63,400, while facing resistance between $64,500 and $66,000. Prominent market maker Wintermute warns that current ETF inflows may only be arbitrage-driven. If prices fail to rise after the buying pressure is absorbed, it suggests that spot marginal buyers are not genuinely bullish.
At the micro level, some individual tokens are showing activity. ZEC rose 10.9% this week due to DCG's Fortitude project expanding Zcash mining operations. HYPE gained 5% in a trading environment characterized by "low beta." However, for a broader market rally to materialize, the primary condition is a decline in Bitcoin's volatility, which would attract long-term capital to reassess its risk-reward profile.
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