Bitcoin has dropped more than 16% over the past month, even as U.S. equities kept climbing. Over the same stretch, the S&P 500 rose 5% and pushed to fresh record highs. That divergence has fueled a range of explanations, from concerns about Michael Saylor-linked bitcoin selling to questions over whether institutional demand is starting to cool.
Jim Ferraioli, director of digital currencies research and strategy at Charles Schwab, offered a much simpler read: bitcoin is losing the momentum trade. In an interview, he said bitcoin has been in a bear market since October, pointing to the sharp sell-off that followed its move to a new all-time high late last year. His framing was blunt. The point was clear.
Bullish industry news has not translated into sustained price strength
Over the past year, crypto has seen spot ETF approvals, billions of dollars in institutional capital, and progress toward clearer regulation in Washington. On paper, that looked like the setup for a stronger and more durable rally. But bitcoin has struggled to hold the kind of explosive upside many investors expected.
Ferraioli said the market found a bottom in early February, and another major Wall Street firm then posted a successful ETF launch, helping revive the institutional adoption narrative. That rebound lifted bitcoin from its February lows. Still, unlike earlier crypto cycles, the move faded before turning into a broad speculative surge. There was a recovery, but not the frenzy that often defines the asset class.
Capital is chasing stronger narratives elsewhere
In Ferraioli’s view, the problem is not a shortage of positive headlines around bitcoin. The problem is competition. He argued that crypto investors have historically been driven less by fundamentals and more by momentum, moving toward whichever market segment offers the strongest price action and the most compelling growth story.
That pattern has long shaped crypto trading. When digital assets become the market’s most attractive speculative opportunity, traders rush in. When attention shifts to another asset class, capital usually follows. Over the past year, those flows have rotated through gold, commodities and equities. Right now, the biggest growth narrative drawing money away is artificial intelligence (AI).
The old bitcoin-stock relationship has weakened
For years, bitcoin and U.S. stocks tended to move in roughly the same direction, making that relationship a useful market signal. That link has weakened. Bitcoin has failed to keep pace with the stock market’s climb, and it also has not rallied in step with positive developments inside crypto, including the renewed attention around tokenization.
By Ferraioli’s account, the current market is not defined by one negative headline or a complete disappearance of buyers. The bigger shift is that momentum has moved away from crypto for now. That, more than any single narrative, helps explain bitcoin’s recent underperformance.