"Bitcoin, 'complete decoupling' from stocks for the first time in 10 years"

Bitcoin is showing an unusual move as it breaks away from the long-standing synchronized flow with the stock market. The previous pattern of stocks and virtual assets (cryptocurrencies) moving in the same direction has been broken, leading to analysis that Bitcoin's role in this cycle should be reconsidered.

According to the newsletter Short Squeeze, so far this year the S&P 500 index has risen more than 16%, while Bitcoin has fallen about 3%. On an annual basis, this is the first time since 2014 that Bitcoin and the U.S. stock market have shown clearly divergent trends.

Until now, Bitcoin has been classified as a type of risk asset and has shown a high correlation with the stock market. However, this link has noticeably weakened this year. This trend runs counter to the market's general expectation that improvements in the regulatory environment and inflows of institutional funds would lead to price increases.

In particular, it contrasts with the strength in the U.S. stock market led by artificial intelligence (AI)-related stocks and an expansion of corporate capital expenditures. It is also notable that investors are flowing back into the stock market while showing interest in traditional defensive assets such as gold, indicating asset reallocation.

Factors specific to the virtual asset market have been cited as the background to Bitcoin's weakness. Forced liquidations occurred in succession, with positions worth billions of dollars being unwound, and retail investor participation also contracted sharply. As a result, what might have been a simple correction is analyzed to have expanded into a broader industry-wide retreat.