Writer: Nancy, PANews
Final night time, US shares witnessed a historic second. Tech big Nvidia’s market capitalization surpassed $5 trillion, writing a brand new chapter in capital historical past. But this similar second utterly devastated the cryptocurrency market.
world capital markets, gold and shares are performing effectively collectively, whereas the crypto market is mired in pessimism, making it more and more troublesome to revenue and underperforming conventional belongings. Though Bitcoin briefly touched a excessive of $120,000, it was extra like a one-man present by capital missing retail traders; altcoins are much more affected by liquidity shortages, lack of innovation, and fleeting hype.
The crypto market has entered “hell mode,” whereas the strengthening of the inventory market and gold has accelerated the siphoning of funds.
The present crypto bull market is displaying indicators of fatigue, failing to ship the anticipated broad-based rally following the halving. Whereas Bitcoin has repeatedly hit new highs, the tempo of improve has slowed and is primarily pushed by Wall Road establishments; altcoins have repeatedly hit new lows, with retail traders struggling vital losses or leaving the market in anger after the “1011” occasion, resulting in a tightening of market liquidity. The crypto market has been pushed right into a interval of utmost issue.
In distinction, as shares and gold take turns strengthening, capital is flowing in direction of extra seen and sure revenue alternatives.
Who may have imagined that Nvidia would stage one other “AI miracle” in the capital market in simply 113 days, turning into the world’s first listed firm to surpass a market capitalization of $5 trillion. This determine exceeds the annual GDP of virtually all international locations besides the United States and China, and much exceeds the complete market capitalization of the complete cryptocurrency market (roughly $3.8 trillion).
Supply: Web
Actually, the “Huge Seven,” led by Nvidia, fueled a collective rally in the US inventory market. The S&P 500 has remained above its 50-day transferring common for 125 consecutive buying and selling days, and its year-to-date return has surpassed that of Bitcoin. Market sentiment is excessive, with bulls even calling for the US inventory market to achieve 7,000 factors.
Information confirms this surge in exercise. Nasdaq information reveals that in the first half of 2025 alone, US retail traders purchased roughly $3.4 trillion value of shares and offered roughly $3.2 trillion, for a complete buying and selling quantity exceeding $6.6 trillion. Based on evaluation by Citadel Securities, a globally famend market maker, retail traders now account for 22% of complete US inventory buying and selling quantity, the highest degree since the “meme inventory frenzy” of 2021. At present, retail traders commerce a median of 1.2 billion shares per day.
This funding enthusiasm is not restricted to US shares. Take South Korea for instance: the KOSPI index has damaged by means of the 4000-point mark, accumulating an almost 70.9% improve year-to-date, making it one in every of the best-performing main inventory indices globally. This market sentiment has additionally led to a major decline in buying and selling exercise in South Korea, the place cryptocurrency buying and selling was beforehand very lively. On October twenty ninth, the native digital asset buying and selling quantity was roughly $3.61 billion, solely 23.2% of the KOSPI’s buying and selling quantity, whereas beforehand this proportion had exceeded 80%.
In the meantime, some funds are additionally flowing into crypto-related shares. Based on Bloomberg, whereas the complete market capitalization of Bitcoin and altcoins has largely moved in tandem for years, this time is completely different. Bitcoin’s rising recognition amongst institutional traders, coupled with speculative funds shifting in direction of cryptocurrency-related shares, has created an almost trillion-dollar hole between Bitcoin and altcoins. Markus Thielen, CEO of 10x Analysis, acknowledged that if retail traders (particularly in South Korea) hadn’t turned their consideration to associated shares, the complete market capitalization of altcoins would have been roughly $800 billion increased. Nevertheless, in the present cycle, altcoins lack new capital inflows, and this hole is unlikely to be crammed in the brief time period. Traditionally, South Korean crypto merchants have favored altcoins, with native exchanges accounting for over 80% of buying and selling quantity, whereas world platforms primarily give attention to Bitcoin and Ethereum.
Confronted with surging demand for shares, buying and selling platforms reminiscent of Robinhood, Coinbase, and Kraken have launched inventory tokenization providers to satisfy the wants of current crypto customers and discover new development. This transfer has additionally diverted some buying and selling exercise from the crypto market.
As well as, amid rising danger urge for food and macroeconomic uncertainty, gold has grow to be the most popular safe-haven asset and is predicted to be one in every of the best-performing belongings in 2025. Based on Goldman Sachs evaluation, whereas Bitcoin presents increased returns than gold, it additionally displays considerably increased volatility. When danger urge for food is excessive, Bitcoin usually performs equally to shares, but when the inventory market declines, Bitcoin’s hedging impact is much less efficient than gold. Due to this fact, gold is at present a extra dependable safe-haven asset, whereas Bitcoin continues to be in the transitional section from a danger asset to a safe-haven asset.
Lately, the A-shares market has returned to 4000 factors. “My dad is a inventory dealer, my mother is a gold dealer, and I am holding ETH. We have all gathered at 4000.” “I am hiding from the bull market in the crypto market,” folks joked in the neighborhood.
The crypto market is going through inside and exterior difficulties; stay affected person and await innovation and funding.
Moreover the capital siphon impact created by the inventory market and gold, which pulls away a considerable amount of investor and retail funds and marginalizes crypto belongings in capital allocation, the inside and exterior difficulties of the crypto market additionally stem from quite a lot of components.
On the one hand, innovation in the present crypto market lacks explosive development. In comparison with the narratives of DeFi, NFTs, and the metaverse that when broke by means of the established perceptions of each insiders and outsiders, the market at the moment is extra targeted on technological iteration, whereas the narratives are consistently being repeated. Even when some narratives can appeal to funds in the brief time period, they usually quiet down shortly, making it troublesome to take care of market exercise and investor confidence. In the meantime, rising narratives reminiscent of RWA, DAT, and stablecoins are primarily dominated by establishments, with restricted returns, low retail participation, and issue in producing widespread market resonance.
A deeper drawback is that almost all altcoins lack clear situation worth and sensible functions, making it troublesome to draw sustainable funding. For instance, MEME is a double-edged sword. On the one hand, it lowers the entry barrier, permitting extra retail traders to take part; but on the different hand, such tasks rely an excessive amount of on tales and emotional drivers, accelerating the PvP nature of funds in the market, finally evolving right into a pure cash recreation with out actual worth creation.
“The present drawback in the crypto market isn’t a scarcity of derivatives, but somewhat an overabundance of ‘digital’ on-chain belongings. What we want now could be to carry extra real-world belongings and providers onto the blockchain. Finance should finally combine with the actual world, and the Web3 trade should shortly align itself with mainstream narratives , reminiscent of AI and the Agent Financial system. In the first half of subsequent 12 months, there could possibly be an enormous bull market in AI, in addition to in the inventory and cryptocurrency markets. But this bull market should be constructed on a basis of real-world integration. The trade ought to attempt to create tangible leads to placing all the pieces on-chain and in Agent Finance, in order to draw extra capital and expertise and transfer in direction of sustainable growth, somewhat than getting slowed down in the inside friction of speculating on MEMEs, ” Zheng Di, a cutting-edge know-how investor, identified in the podcast “Zhi Wu Bu Yan”.
Based on crypto KOL @Sea , the crypto trade requires endurance and a long-term perspective. “AI and US shares are scorching, but in the event you shift most of your funds and a spotlight there, whether or not for funding or startups, will you’ve gotten a stronger relative benefit than in the crypto world? The crypto world is an efficient market/good trade. Though it is like looking for gold in a pile of rubbish day by day, the fast clearing and self-iteration capabilities of the free market, together with the gathering of worldwide builders, make it extra doubtless that miracles will emerge. “
“Crypto merchandise have discovered a product-market match, or not less than paved the manner for crypto verticals which have achieved Product-Market Match (PMF). Whereas such merchandise are nonetheless few and much between, with every growth cycle, the infrastructure continues to enhance, and information accumulates, we’re creating extra merchandise with real-world worth. These merchandise are usually not solely reshaping the market construction but additionally pioneering solely new asset courses reminiscent of prediction markets and perpetual contracts. Now, as Wall Road elites and high-ranking U.S. authorities officers lastly start to concentrate to and acknowledge cryptocurrency as a proper trade, early individuals ought to strengthen their resolve,” crypto researcher Monk wrote.
On the different hand, as a typical high-risk asset, the development of the crypto market usually depends on the spillover impact of upstream funds. As rates of interest step by step decline, the returns on low-risk belongings (reminiscent of deposits and bonds) lower, and funds step by step circulate to high-risk areas, reminiscent of tech shares, development enterprises, and cryptocurrencies. Nevertheless, this transmission of funds isn’t instantaneous but has a sure time lag. As talked about earlier, with shares and gold already offering comparatively secure returns, traders are inclined to prioritize these belongings with seen income and comparatively controllable dangers, making it troublesome for the crypto market to grow to be the first alternative instantly. In different phrases, solely after the rate of interest minimize cycle step by step releases liquidity and transmits it step-by-step by means of dangerous belongings reminiscent of shares can the crypto market receive incremental funds.
Moreover, the lack of regulation is one in every of the core points at present going through the crypto market. Take the 10/11 assaults for instance. This occasion not solely uncovered the trade’s shortcomings in infrastructure and danger administration, severely impacting market liquidity, but additionally affected conventional traders’ confidence in crypto belongings. It is vital to grasp that, in contrast to conventional finance, the crypto market operates 24/7, leading to quicker growth, extra instant responses to information, and a extra various participant construction. Which means the impression of danger occasions is usually extra concentrated and extreme, with a extra direct impact on retail investor funds and total market confidence.
“ Establishing a liquidity buffer fund and introducing a circuit breaker mechanism just like that of the US inventory market are completely obligatory. Conventional monetary markets have realized these danger management classes by means of painful experiences, and the cryptocurrency market ought to be taught from them. In occasions like 10/11, if a liquidity buffer fund may enter the market to purchase time and permit arbitrageurs to re-enter, many issues could possibly be prevented,” Zheng Di identified. This view additionally highlights the pressing want for danger administration and institutional growth in the crypto market.
In abstract, the crypto market is present process a baptism of fireplace. Nevertheless, it nonetheless possesses distinctive benefits reminiscent of fast iteration, world participation, and technological innovation. Specializing in sensible functions and worth creation, and adhering to endurance and long-termism, could also be the key methods for survival and breakthrough in the present market.
