Stocks Are at All-Time Highs. Why Isn't Bitcoin?

Hinzugefügt: 2026-05-31

[00:00:02]One of the questions that you guys have been asking, what is going on with Bitcoin versus stocks? I thought these two assets were supposed to be correlated. One is at an all-time high and one is way off the all-time high.

[00:00:15]Well, of course, you guys know Bitcoin has these 50 to 75% draw downs every couple years. And this is something that's regular market behavior. But even though we have these drawdowns, medium and longerterm correlations between the U uh US stock market and Bitcoin continue to persist. So how does this happen? Correlation does not mean that the returns match. It means that the behavior on a day-to-day or week to week basis matches. And that is what I want you guys to understand. These two assets still are extremely correlated. But just because they're correlated doesn't mean that their returns are going to be similar on a day-to-day, month-to-month, or year-to-year basis.

[00:01:02]Bitcoin is underperforming stocks materially, but the correlation is still high. So, understand that liquidity broadly is supportive. It is helping the stock market and Bitcoin has been helped by that dynamic since we came off of the worst of the worst with the oil price shock.

[00:01:25]So the reason that stock the stock market is doing so well relative to Bitcoin is a stock market story. Just as the relative uh reason that Bitcoin is underperforming stocks is a Bitcoin story, that's a roundabout way of saying that the stock market is doing well because the fundamentals are really good and Bitcoin did poorly in Q4 of 2025 and Q1 of 26 because it was overextended and long-term holders were selling their positions and locking in gains of over a 100,000. Both of these dynamics are happening. They're both true and at the same time they are both driven by liquidity which keeps that correlation strong. So correlation and returns are not the same thing.

[00:02:20]My my conclusion my takeaway for you guys at home the pros is essentially don't get discouraged by Bitcoin's underperformance.

[00:02:30]It hasn't stopped becoming a liquidity asset. It's also now getting a passive bid in the market. This is uh this is a dynamic that should keep you bullish on Bitcoin for a long long time. Bitcoin is now receiving a structural bid from income globally that it hasn't before because of ETFs and will continue for many years and is doing it's receiving that bid alongside stocks. So the simple explanation for this is that when people earn, if they don't spend 100% of their income, it goes into savings. That savings does end up some in the 401k in some diversified portfolios, mutual funds. And that is where the bid for Bitcoin is coming from because we know that Black Rockck, Fidelity, these large asset managers are recommending one to 3% positions in Bitcoin and including it in some of their long-term mutual funds, some of their longdated allocation strategies. Bitcoin is absolutely right in there. So, Bitcoin is receiving a passive bid. What that means for Bitcoin in the context of the global economy GDP growth and the AI revolution is that as the GDP of the world continues to grow and the United States does do well and it GDP nominally continues to grow at a very rapid pace that is money that will go into Bitcoin structurally. If you've been listening to the Bitcoin layer for a while, you already understand where we are headed.

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[00:04:32]self-custody, cyber security, inheritance, node running, the full stack. Go to the bitcoinway.com/tbl and book a free call and learn how to step up your game as Bitcoin matures. And I believe that this 25 to 26 transition and sell off from 120 to 60 is a huge moment in Bitcoin's history to continue to shed some of the past price behavior that the market has held over Bitcoin such as 80% drawdowns. A 50% draw down is way bigger than uh way different than an 80% draw down. Believe it or not, it shows a tremendous amount of maturity.

[00:05:20]The structural bid in IBID and strategy is not something that we've seen before.

[00:05:26]I hope you guys are reading Yan Bergman's incredible Wednesday Bitcoin letters where he's walking you through this dynamic of Bitcoin's market is changing. It's not the same as 2022.

[00:05:39]This is not the same type of bare market as 2022. In fact, there is a lot that is different in showing that maturation.

[00:05:47]Guys, I'm very bullish Bitcoin over essentially every time horizon and it's really hard to know.

[00:05:56]It's really hard to call bottoms, let's say. And so I stuck my neck out there and I have my bottom call at 64. And I do believe that Bitcoin is going to hold this range. And I do believe that the straight of horm opening back up is going to be broadly bullish for Bitcoin as well as the stock market. And the stock market already responding. Bitcoin bouncing off of 72K today. I'll show you a chart here in a second.

[00:06:23]So, Bitcoin, that structural bid is something that I want us to anchor a lot of our bullishness in.

[00:06:36]Because when we look at what are the bearish motives for the Bitcoin price, structural inflation that reaches five, six, 7% will be very dangerous. But we can't speculate on how dangerous because look at how well the economy and the stock market have done with rates at 4 to 5%. Remember some people thought Bitcoin was a zero interest rate phenomenon, but it went to an all-time high with Fed funds basically close to 5%.

[00:07:13]And so Bitcoin is not in a zero interest rate policy dynamic and it continues to trade fairly well with rates where they are in an elevated fashion. So I actually do want to see interest rates stay at a level that is high enough to encourage good investment because remember 0% rates encourage malinvestment.

[00:07:40]So a higher hurdle rate is good for the global economy. But of course, at what point does it become restrictive?

[00:07:49]Don't watch interest rates. Watch bond volatility for that metric. You have us to be your move index watchers. It's all baked into TBL liquidity. If it's too much math for you, if you want to do absolutely no math whatsoever, we give you two basic indicators for Bitcoin.

[00:08:10]Number one is whether TBL liquidity index is above 50 or not. If it's above 50, it's broadly favorable. And then on a more short-term basis, what does TBL liquidity indicator say?