Wintermute: BTC trading is more bearish than stock indices, and the upward narrative premium no longer exists.

According to Mars Finance, a recent report from Wintermute indicates that while Bitcoin's correlation with the Nasdaq index remains as high as 0.8, Bitcoin's trading performance is more bearish than the stock index, reacting far more to market pessimism than optimism. This year, on days when the stock market falls, BTC's decline is generally greater than that of the stock index, while on days when the stock market rises, Bitcoin's gains are smaller—a pattern last observed during the 2022 bear market. Wintermute suggests two main underlying factors contributing to this phenomenon: for much of 2025, funds that typically flowed into the cryptocurrency sector (including new token issuances, 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. While Bitcoin remains correlated with shifts in global risk sentiment, it fails to benefit proportionally when optimism returns. It's more like a "high beta tail" of macroeconomic risk than an independent narrative; the downside beta effect persists, but the upside premium is gone. The current liquidity situation for cryptocurrencies differs from previous risk cycles. Stablecoin issuance has plateaued, ETF inflows have slowed, and trading platform market depth has yet to recover to early 2024 levels. This vulnerability amplifies the negative impact of stock market corrections. As a result, participation in Bitcoin's declines remains higher than its rises, exacerbating this performance bias.