Bitcoin Underperforms Equities Amid Macro Pressures and AI-Driven Sentiment
Bitcoin BTC has struggled to keep pace with U.S. equities, both in absolute terms and relative performance. Adrian Fritz, chief investment strategist at 21Shares, attributes the divergence to macro pressures, investor sentiment, and what he calls a “panda market”—a bearish phase that falls short of a full crypto winter.
“Technically, we’ve entered a bear market,” Fritz told CoinDesk. Bitcoin has dropped over 30% from its highs, falling below the 50-week moving average, a key technical signal of shifting market momentum. Altcoins have fared worse, with many down 50% or more.
Over the past month, Bitcoin has declined 22%, sharply underperforming the S&P 500 (down 2.5%) and the Nasdaq (down 4%), an index historically correlated with BTC. Fritz points to the outsized influence of artificial intelligence on equities. “Exclude the Magnificent Seven, and the S&P isn’t up much. AI is clearly driving sentiment—it’s the shiny new toy on Wall Street,” he said.
This AI-driven enthusiasm may also be diverting capital from crypto. While blockchain-AI use cases—such as content verification—have been discussed for years, practical adoption remains limited. “People feel AI’s impact daily. Blockchain still hasn’t delivered that moment,” Fritz noted.
Leverage has added pressure. The October correction began with $20 billion in liquidations, and daily liquidations of $500 million have become common. According to Fritz, the pullback reflects excessive risk-taking rather than fraud or hacks. Even long-term holders are taking profits.
Gold remains a safe haven, though down about 10% from recent highs. “Bitcoin trades like a risk-on asset,” Fritz said. “It has gold-like properties, but its liquidity and 24/7 trading make it highly responsive to sentiment.”
Technically, Bitcoin could bounce, but failure to reclaim $102,000 may signal further downside, with the 200-week moving average near $55,000 as potential support. Looking ahead, Fritz expects continued year-end volatility, with regulatory clarity and falling interest rates potentially supporting a rebound in 2026. “Bitcoin is solid. Altcoins need fundamentals, and AI-blockchain tokens may attract attention eventually, but for now, crypto is lagging equities.”
