Author: Cathy, Blockchain for Beginners
The best and worst days for U.S. stocks this year were only 24 hours apart, and BTC followed suit on both days.
On November 4, the Dow rose 3%, and BTC rebounded to $81,000. On November 5, the Nasdaq closed down 5.5%, and BTC dropped back to $75,200. What drove it down wasn’t an on-chain crisis, but an AI sell-off. Two months ago, Grayscale said BTC was decoupling from tech stocks and moving toward gold—then the correlation flipped right back.
01 How an AI sell-off crashed BTC
The trigger has nothing to do with cryptocurrency.
The day before, which was the best day since April 2025, according to BTSE Chief Operating Officer Jeff Mei, the market felt the Iran conflict was coming to an end. Twenty-four hours later, sentiment flipped.
Reuters reported that after Democrats took control of Congress, concerns grew over a slowdown in data center construction, causing chip stocks to decline for the second consecutive day, with Friday being the second day. The Nasdaq Composite closed down 5.52%, the Dow fell 1,833 points, and the semiconductor ETF dropped over 12%, marking its worst performance since March 2020.
Chips took the hardest hit. NVIDIA closed down 9.26%, and AMD fell 17.26%. AMD’s earnings actually beat expectations, with data center revenue nearly doubling, but the market completely ignored the fundamentals. All 11 sectors of the S&P 500 declined, as panic spread from chips to everything else.
BTC followed suit.
According to CoinGecko data, BTC dropped from around $80,300 to an intraday low of approximately $75,200, closing the day at $76,000—a decline of about 5.5% from the previous day. Over $1 billion in positions were liquidated within 24 hours, nearly 90% of which were long positions, affecting approximately 210,000 traders.
The transmission path is not complicated: tech stock panic leads to institutional selling of BTC ETFs, ETF outflows trigger liquidations of on-chain leverage, accelerating price declines. Farside data shows that net outflows from BTC ETFs totaled approximately $1.5 billion between October 30 and November 5. October 30 was also the day tech stocks plummeted, with Intel dropping about 29% due to disappointing earnings guidance; on that same day, ETF outflows reached $643 million.
The source of today's crypto crash is not on-chain.
02 The promised decoupling flipped in just two months
In February, BTC dropped to around $60,000, halving from its all-time high of $126,000 in October last year. In a report on February 9, Grayscale’s research head Zach Pandl stated that over the past at least 12 months, BTC’s price movements have been highly correlated with early-stage, high-valued tech software stocks. He argued that this pullback is more about a broad de-risking of growth portfolios rather than an issue unique to crypto.
By the end of August, the same individual provided a completely different set of data: over the past three months, the correlation between BTC and gold in price movements rose from near 0 at the start of the year to over 50%, while the correlation with the Nasdaq 100 dropped from over 60% to approximately 33%. This shift occurred against the backdrop of the U.S. federal debt surpassing $40 trillion in August, with market anxiety over debt driving capital toward “scarce assets.”
Market interpretation: BTC has finally moved away from tech stocks and into the gold camp.
Two months later, K33 Research cooled expectations. On October 21, they found that BTC’s correlation with the Nasdaq had risen again, with two-week returns nearly aligned. At the time, BTC’s 28-day volatility dropped to 1.2%, nearing its yearly low. Research Director Vetle Lunde cautioned that “recent relative resilience does not mean a true decoupling from equities,” and reminded that “volatility compression is typically followed by a breakout.”
Then came November 5. The Nasdaq 100 fell about 6.5%, BTC dropped around 5.5%, while gold slightly rose 0.9%. BTC follows the Nasdaq, not gold.
This is not the first time.
In early 2022, data firm Kaiko found that BTC moved in high sync with the Nasdaq, reaching the highest level of correlation since July 2020. Meanwhile, BTC’s correlation with gold turned negative during the same period, first challenging the notion of BTC as “digital gold.”
During the April 2025 tariff shock, BTC briefly decoupled, rising 13% that month while the Nasdaq remained largely flat; Bernstein analysts called this performance “striking.” But once the tariff pause took effect, synchronization quickly resumed. The reference point for the November 5, 2025, U.S. market plunge is April 2025—two shocks of equal magnitude, with BTC weathering the first but not the second.
Different institutions use different time windows to measure correlation. Grayscale looks at 90 days, while K33 examines two-week returns. Change the window, and the conclusion changes. The same Zach Pandl said in February that BTC “behaves more like a growth stock,” and in August said it “is shifting toward gold”—the same person, two different statements in the same year.
Relevance is not a conclusion; it keeps turning over itself.
03 BTC and gold both finished at the bottom this year
On October 23, Charlie Bilello, Chief Market Strategist at Creative Planning, presented a ranking of assets: among 21 asset classes, BTC fell 7.3% for the year, gold fell 7.5%, tying for the two worst performers. During the same period, short-term U.S. Treasuries rose 2.9%, and the commodity basket rose 52.5%. As of the close on November 5, BTC’s year-to-date decline had widened to approximately 13%.
His evaluation: "Since 2011, there has never been a year where both BTC and gold ranked last."
Traditionally, when stocks fall, capital flows into gold and bitcoin. But this year, both declined together, while oil and commodities were the real winners. The "safe-haven" label doesn't hold up well in an inflationary environment.
Gold didn’t fare much better. It hit a record high of around $5,600 in January, then dropped to approximately $4,095 by November 5, a decline of about 27% from its peak.
During the March Iran conflict, oil prices surged 63%, while inflation concerns pushed up U.S. Treasury yields and strengthened the dollar, forcing leveraged investors to sell gold for cash. Gold posted its worst monthly performance since October 2008. Two “safe-haven assets”—one brought down by war.
But in the same March, BTC did not decline. Grayscale’s April report was titled “Resilience in War”: major stock indices, bonds, and precious metals all fell, while crypto saw a modest increase. Their explanation was that in the preceding months, BTC had already cleared a significant amount of risk positions, combined with Strategy’s purchases of approximately 44,400 BTC that month, which supported the price.
In the same year, BTC did not follow the stock market down in March, but then declined with tech stocks in November. "Digital gold" is not a fixed attribute—it's more like a shifting state.
The pattern is even clearer within the same week. After the election results on the 4th, BTC rebounded, gold rose about 3%, and the Dow increased by 3%, with all three rising together. On the 5th, sentiment shifted: BTC dropped about 5.5%, the Nasdaq 100 fell about 6.5%, while gold rose 0.9%. BTC first rose alongside all assets, then moved separately with tech stocks downward.
What exactly is 0.04 BTC?
On February 9, Grayscale research head Zach Pandl laid out the issue in a report:
"Is BTC a store of value like gold, or a growth asset like tech stocks? Short answer: We believe it's both."
Honest answer: BTC has indeed swung between two identities—holding strong against war-related shocks in March, then falling alongside tech stocks in November.
The risk asset side is easy to see. After the spot ETFs were approved, a large influx of institutional capital caused BTC’s price movement to resemble that of a high-volatility tech stock more and more. When the broader market rises, BTC rises more sharply; when the market falls, it drops even more sharply.
The numbers speak clearly. On October 30, tech stocks plunged, and BTC ETFs saw net outflows of $643 million; on November 5, they fell again, with another $430 million+ flowing out. Each shift in institutional sentiment directly transmits pressure to BTC’s price through the ETFs.
Grayscale also previously noted that only about 15% to 20% of global crypto activity occurs in the U.S., and that crypto will move forward regardless of the election outcome. However, the price movement on November 5th showed that sentiment in the U.S. market can still influence global BTC prices through ETFs.
Look at the store of value aspect over a longer time horizon. Bilello’s data shows that since 2011, BTC has delivered an average annual return of 120.6%, while gold has returned only 6.3%. When removing short-term volatility, BTC significantly outperforms inflation compared to gold.
Even JPMorgan has started to take notice. In October, they included BTC in their long-term capital market assumptions for the first time, projecting a baseline annual return of 10% over the next decade—higher than the 7.5% for U.S. large-cap stocks. However, JPMorgan also maintained caution: volatility at 55%, unstable correlation, and they did not include BTC in their core portfolio models.
Pandl also wrote in that February report: "If BTC succeeds as a monetary asset over the long term, its price behavior may eventually resemble that of gold."
Pay attention to the word "if." BTC has only been around for 17 years and has not yet achieved the same status as gold.
Three indicators are worth monitoring continuously:
- Has the 90-day correlation between BTC and the Nasdaq 100 remained above 0.5?
- Has the spot ETF experienced net outflows for more than a week?
- When tech stocks next surge or plunge, will BTC follow along or act independently, as it did in March?
17 years, not enough for it to grow into itself.