BIT Research: Why Are Stocks Hitting Record Highs While Gold and Bitcoin Are Falling?
- Core Insight: Since 2025, the market has been alternately dominated by three major macroeconomic catalysts: Federal Reserve interest rate hikes, geopolitical conflicts, and the AI investment boom. This has led to a significant divergence in the performance of the S&P 500, gold, and Bitcoin. Bitcoin is currently approaching a cyclical bottom, and a macro environment improvement expected after September is likely to once again drive related assets higher.
- Key Factors:
- Significant Asset Divergence: The S&P 500 is up 9%, gold is down 6%, and Bitcoin is down 31%, showing a decoupling among these three traditionally correlated assets.
- Federal Reserve Policy Pressure: Expectations for rate cuts have completely reversed. The hawkish stance at the June FOMC meeting has put pressure on liquidity-sensitive assets like gold and Bitcoin.
- Geopolitical Conflict Impact: The US-Israeli strike on Iran drove oil prices higher, pushing Bitcoin down to $60,000 and breaking the traditional safe-haven pattern.
- AI Narrative Takes Center Stage: Anthropic's annual revenue surpassed $30 billion, and NVIDIA's investment in Marvell boosted the Nasdaq index significantly.
- Slowing Trading Momentum: Since June, companies have focused on AI costs, and China's open-source models have entered the market. Bitcoin fell back to $63,000 after May's CPI exceeded expectations.
The current market is in a repricing phase driven by multiple macro catalysts. Year-to-date, the S&P 500 has risen by 9%, gold has fallen by 6%, and Bitcoin has dropped by 31%, showing a clear divergence among three asset classes that have traditionally exhibited some correlation. Factors such as Federal Reserve policy expectations, geopolitical conflicts, and investment in AI infrastructure have successively become the dominant market narratives, constantly reshaping the pricing logic of risk assets.
As it stands, asset performance is no longer determined by a single factor but is being continuously repriced around new catalysts at different stages. This has ranged from the Fed's hawkish stance, to the escalation of the Iran conflict, and then to the boom in AI infrastructure investment.
Fed & War Dominate Markets: Liquidity Expectations Weigh on Risk Assets
The biggest market change since the beginning of the year has been the reversal of expectations for Fed policy. After Trump nominated Kevin Warsh, the market began to price in a more hawkish monetary policy, completely reversing expectations for three rate cuts this year. Subsequently, the June FOMC meeting further confirmed the hawkish stance, putting continued pressure on liquidity-sensitive assets like gold and Bitcoin.
Meanwhile, military strikes by the US and Israel against Iran led to disruptions in shipping through the Strait of Hormuz, rising oil prices, and a stock market pullback. Gold also fell, as the market speculated that central banks in the Middle East might prioritize funds for reconstruction financing rather than continuing to buy gold. Bitcoin also dropped to $60,000 under heavy liquidation pressure, breaking its previous pattern of performance during geopolitical conflicts.
AI Narrative Takes Over: From Infrastructure Frenzy to Slowing Trading Momentum
As the conflict de-escalated, market focus quickly shifted to AI infrastructure. NVIDIA's announcement of a $2 billion investment in Marvell Technology and Anthropic's Annual Recurring Revenue (ARR) surpassing $30 billion – exceeding OpenAI's previously disclosed $20 billion ARR – propelled the Nasdaq related index from 23,200 points to 30,500 points, establishing AI as the new market theme.
However, entering June, the momentum of AI trades began to wane. The "tokenmaxxing" trend cooled down, with companies focusing more on token usage costs. Chinese open-source models accelerated their entry into the market. OpenAI postponed its IPO to 2027, and Meta planned to sell surplus AI computing power, leading the market to reassess AI investment returns. Concurrently, the US May CPI rose from 3.3% to 3.8%, exceeding expectations. Bitcoin ETFs saw significant net outflows, shedding $9 billion worth of Bitcoin. Bitcoin's price subsequently fell back from $82,000 to around $63,000, once again demonstrating its high sensitivity to inflation and Fed policy expectations.
Overall, the market has experienced a shift among three core catalysts this year – Fed policy, geopolitics, and the AI narrative – driving a clear divergence among stocks, gold, and Bitcoin. Looking ahead, we expect the Fed's hawkish stance to gradually reverse after the summer. Gold has entered technically oversold territory, and Bitcoin is approaching its cycle-bottom target range of $50,000 to $55,000. With the September FOMC meeting approaching, recovering AI usage demand, and cooling inflation expectations, gold, Bitcoin, and AI-related trades are all expected to regain upward momentum.
*The above opinions are partly sourced from BIT on Target. Contact us to get the full BIT on Target report.
Disclaimer: Market conditions involve risk and investment requires caution. This article does not constitute investment advice. Digital asset trading may involve significant risk and volatility. Investment decisions should be made after careful consideration of personal circumstances and consultation with financial professionals. BIT is not responsible for any investment decisions made based on the information provided herein.
