Stormrake - Insights #25bps

The Rake Review: December 2025

Wed, 31 Dec 2025 09:26:00 +1100

2025: A Year in Review

As people unwrap their gifts this holiday season, it's time to reflect on a year that didn’t go as many had hoped. While Bitcoin is likely to close 2025 in the red, it has been far from a wasted year. Quiet wins, foundational progress, macro shifts have quietly taken shape and may set the stage for what comes next. Compared to many other assets, Bitcoin may now be undervalued, not just relative to its own history, but within the broader macro environment.

Rather than the usual monthly Rake Review, we’re taking a deeper dive into the year that was.

January: Trump Returns

One of the biggest stories from 2024 became reality in January as Donald Trump was officially inaugurated and returned to the White House. The bullish sentiment surrounding his return saw risk on assets push higher, with Bitcoin setting its first all time high of the year just shy of $110K.

Optimism spread quickly. Trump introduced the Crypto Task Force within the SEC and Gary Gensler stepped down as chair. He was replaced by Paul Atkins, a long-time critic of Gensler's anti-crypto stance and far more favourable towards the space.

February: The Month of Rumours

The bullish tone continued, but headlines shifted. February was dominated by speculation and two major narratives emerged. First, rumours surrounding sweeping new tariffs from Trump's economic agenda began to circulate and started to weigh on risk markets. Second, the idea of a Strategic Bitcoin Reserve began to build. It was still unconfirmed, but momentum was growing.

March: Strategic Bitcoin Reserve Confirmed

March may go down as one of the most important months in Bitcoin’s history. The US Government officially announced the creation of a Strategic Bitcoin Reserve. While Bitcoin had previously been adopted by countries like El Salvador and Argentina, the involvement of the US brought a level of legitimacy the space had never seen.

This move did not just validate Bitcoin to institutions and retail investors. It integrated Bitcoin into global government strategy.

April: Markets Liberated

Tariff speculation finally turned into reality. April 3 became known as Liberation Day. Trump announced tariffs on 185 countries, with a base 10 % applied to most and higher rates for others. The result was a broad selloff across markets. Bitcoin fell to $75K and the S&P 500 also posted its yearly low.

The fear was short lived. Markets rebounded and Bitcoin kicked off a seven week bullish streak.

May: Sell in May and Go Away?

That phrase has been passed around for years, but it did not apply in 2025. Bitcoin extended its rally and set a new all time high at $112K. This came as US debt surged past $37 trillion and confidence in the traditional system continued to erode. Investors rotated out of the dollar and into hard assets, with Bitcoin one of the biggest beneficiaries.

June: Middle East Conflict

Just as momentum was building, geopolitical tensions flared. Conflict between Iran and Israel rattled risk markets. A brief pullback followed, but it did not last long.

By the end of H1, Bitcoin was up over 15 % for the year, the S&P 500 had gained 5.5 %, gold was up 26 % and silver had climbed 25 %.

July: Regulatory Wins and Momentum

With conflicts easing and tariffs temporarily paused, July saw another push higher. Bitcoin hit a new all time high at $123K.

The month was also defined by major wins on the regulation front. The first Crypto Week was held in Washington and three key bills passed through Congress — the GENIUS Act, CLARITY Act and Anti-CBDC Act. The GENIUS Act was signed into law, providing stablecoin regulation and clearer crypto guidelines. While not directly tied to Bitcoin, it gave broader confidence to the entire crypto space.

The first whispers of altseason began to surface.

August: Ethereum Runs and Executive Order Signed

Momentum carried through into August. Bitcoin pushed just above July’s high at $124K, but this time it was Ethereum that took centre stage.

Institutional accumulation was the dominant narrative. Spot ETF flows into ETH were at their highest since launch. Ethereum reached a new all time high just shy of $5,000, its first in nearly four years.

Another big win for Bitcoin came with an executive order that allowed digital assets to be included in 401K retirement accounts. A major step forward for adoption in the US.

September: Rate Cuts and Decentralised Momentum

September has historically been Bitcoin’s worst month. In 2025, price held steady, setting up a potential fourth quarter rally.

DeFi took the spotlight. Decentralised exchanges hit record volume. Hyperliquid continued to dominate until Aster arrived and quickly became a serious competitor.

Macro-wise, the US saw its first rate cut of the year. Signs that quantitative tightening was coming to an end, and liquidity was starting to return. A key turning point for risk markets.

October: New High and the 10/10 Crash

The month began with strength. Bitcoin hit a new all time high at $126K in the first week.

Then came October 10.

Trump issued a surprise tariff threat on China, this time at 100%. Markets sold off sharply. A stablecoin depegged on Binance, market makers were caught offside and Bitcoin crashed from $117K to $102K. Some altcoins dropped more than 80 % in less than 30 minutes.

Close to $20 billion was wiped in liquidations. Since then, Bitcoin has fallen over 30 % and is now red on the year. Meanwhile, the S&P 500 has recovered and gone on to set new highs.

November: Yen Pressure Returns

Source: https://www.tradingview.com/x/qB3DMMni/

The main story in November was once again Japan. Last year, it was a surprise rate hike. This year, it was surging bond yields that triggered another potential unwind of the yen carry trade, with both the 10-year and 30-year yields hitting their highest levels since the turn of the century.

Rising borrowing costs forced institutions to exit risk on positions, including crypto. Bitcoin came under pressure as a result.

Still, there was a silver lining. The US Federal Reserve officially announced the end of quantitative tightening. It did not spark a rally, but it laid the groundwork for future expansion.

December: Metals Take the Lead

Bitcoin was flat in December, with little interest in risk. The Fed cut rates, the BOJ raised them, and the effects cancelled each other out.

Instead, all eyes were on commodities. The Fed announced it would begin buying $40 billion in Treasuries. The first taste of quantitative easing. Gold continued to climb to new highs on daily closes, and silver surged 45 % for the month.

Bitcoin sat idle. But historically, metals lead the way and risk follows. That rotation may arrive early in 2026.

What Does This Mean for 2026?

There is no hiding from the fact that Bitcoin has underperformed in 2025. But it was a year of progress, development and structural change.

We saw:

Multiple all time highs
The creation of the Strategic Bitcoin Reserve
Pro crypto legislation signed into law
A crypto friendly SEC and White House
Expanded access to Bitcoin through retirement plans
The end of tightening and early stages of monetary easing

All of this came alongside a red year for Bitcoin and currently 30% down from its all time high. Expectations are more grounded going into 2026. No calls for blow off tops or vertical rallies. But given the policy backdrop and recent correction, Bitcoin looks far closer to a bottom than a top. The groundwork has been laid throughout the year, and whilst not reflected in the price performance of Bitcoin, it has been invaluable for the long term health and performance for Bitcoin…

At current levels, it is fair to say Bitcoin is undervalued.

Stormrake 2026 Bitcoin Thesis:

Stormrake expects Bitcoin to trade materially higher in 2026, with a base case range of $180,000 to $250,000. The drivers are not speculative narratives, but balance sheet stress, sovereign refinancing pressure, and structurally limited supply.

Roughly $7 trillion in US debt matures in Q1 (and over a third of all US debt to mature in 2026). It must be refinanced at meaningfully higher yields, pushing interest expense near defence-level spending. Policy is no longer about inflation or employment. It is about fiscal survival. Bitcoin benefits not from collapse, but from visible refinancing stress and the constraints it places on monetary tools.

Liquidity is returning, not through headline QE, but quietly via repo facilities, yield curve interventions, and regulatory nudges. The Fed is already injecting billions through overnight repo. That liquidity is flowing into scarce assets. Bitcoin absorbs it faster each cycle.

Post-halving supply is negligible. ETF flows are steady. Institutions are allocating gradually.

Corporate treasuries and long-term holders are reducing float. 2026 is not about euphoria. It is about absorption.

Risks remain. A failed Treasury auction, prolonged high rates, or renewed regulation can delay upside. But in every stress case, the long-term thesis holds. Bitcoin is not pricing perfection. It is pricing policy distortion and fiscal constraint.

Bitcoin in 2026 is not competing with tech stocks or altcoins. It is competing with sovereign credibility. Volatility is the cost. Scarcity is the payoff.

Video of the month:

Michael Saylor Keynote | Bitcoin MENA 2025

Education: Beyond Price: On-Chain Metrics That Matter

Most Bitcoin investors only look at price as a way to measure value and decide whether to enter or exit a position. But there is much more to Bitcoin than just price, especially when it comes to evaluating where we are in the cycle. This is where on-chain data comes in, helping to assess Bitcoin’s true value based on investor behaviour, holding patterns and capital flow.

Here are three of the key on-chain metrics we use to better understand Bitcoin's value. Each provides a different lens on sentiment, valuation, and cycle timing.

MVRV Z-Score: Market Value to Realized Value

MVRV Z-Score is a chart that uses blockchain data to highlight when Bitcoin is significantly over or undervalued compared to its historical fair value.

It’s based on three components:

Market Cap (black line)
Realised Value (blue line), not the current Bitcoin price. This is calculated by taking the price at which each Bitcoin last moved (wallet to wallet), then averaging those prices and multiplying by the total circulating supply
Z-Score (orange line), a standard deviation measure that identifies extreme differences between Market Cap and Realised Value

Source: https://www.bitcoinmagazinepro.com/charts/mvrv-zscore/

On the chart, the green band near ~0.10 represents undervaluation and typically aligns with cycle bottoms. The red band around ~7 indicates overvaluation and has historically marked cycle tops. When Bitcoin enters either band, a top or bottom has usually followed within two weeks.

Right now, the Z-Score sits below 1, signalling that Bitcoin is undervalued and still trending lower. If the price continues to drop, the Z-Score will likely follow. Should it enter the green band, this would suggest a bottom is near and historically has offered generational accumulation opportunities.

Short Term Holder Realised Price:

Understanding Sentiment Through Recent Buyers

This metric reflects the average price that Bitcoin has been moved on-chain within the past 155 days. Anyone holding Bitcoin for less than 155 days is considered a short term holder.

Short term holders are more reactive to market volatility. They are more likely to sell during corrections and are typically driven by short term sentiment. This metric gives us a clear picture of whether recent buyers are in profit or in drawdown.

Source: https://charts.bitbo.io/sth-realized-price/

The chart shows Bitcoin price (yellow line) against the short term holder realised price (green line). When price is above the STH realised price, it indicates a bullish market as these holders are in profit. When price is below, it signals bearish sentiment as they are in loss.

Currently, the STH realised price sits around $99.7K, while Bitcoin is trading at $87K. That gap highlights a clear sentiment shift. Short term holders are under pressure, which explains the weak price action and overall bearish tone.

This metric is not only useful for sentiment. It also often acts as a dynamic support or resistance level during different phases of the cycle.

Long Term Holder Supply:

Tracking Smart Money Accumulation and Distribution

Long term holder supply refers to the total Bitcoin supply held by wallets that have not moved their coins for at least 155 days.

Source: https://charts.bitbo.io/long-term-holder-supply/

In the chart, Bitcoin price is shown by the orange line, and long term holder supply is represented by the green area. This metric helps us see when long term holders are accumulating or distributing their coins, and it usually leads price action.

Long term holder supply tends to peak just before Bitcoin price tops. This is when early investors begin distributing. It also tends to bottom around Bitcoin’s price peak, as new long term holders accumulate during bear markets. An increase in long term holder supply after a correction typically signals the early stages of a new cycle.

Currently, LTH supply sits around 14.1 million, the lowest since 2021, after peaking in June. That peak occurred just months before Bitcoin’s current all time high at $126K. If this supply begins to increase again, it would confirm that the cycle top is in, and accumulation is once again underway.

These are just three of many useful metrics that go beyond simple price analysis. Together, they help identify whether Bitcoin is undervalued, measure market sentiment, and give clues as to where we are in the cycle.

As it stands:

MVRV Z-Score suggests Bitcoin is undervalued
STH Realised Price shows short term sentiment is bearish
LTH Supply points to a potential cycle top already in

All three tell a story that Bitcoin may be in a bottoming phase. These metrics should be tracked regularly as they are often early signals of where Bitcoin could go next.

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.

Disclaimer

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.

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The Rake Review: November 2025

Wed, 03 Dec 2025 13:32:32 +1100

November Brought Bearish Price Action but Macro Tailwinds Are Building

Just last month we saw all time highs. Now, one of Bitcoin’s largest buyers has paused its accumulation, bear market signals have triggered, and sentiment has turned. But despite all of this, several key factors suggest this market may be fundamentally different from those we’ve seen before.

Bitcoin Enters a New Macro Era

Since Bitcoin's inception it has followed a recurring pattern centred around the halving events, commonly referred to as the four year cycle. Historically this cycle has consisted of three years of bullishness followed by one extreme year of a bear market, often marked by an 80% drawdown. But this time, it is different?

New fundamental drivers that were not present in previous cycles have changed the structure entirely. Relentless buying from newly launched spot crypto ETFs, the emergence of Bitcoin treasury strategies from corporates, and most importantly sovereign accumulation of Bitcoin as a strategic reserve asset have all supported the bullish phase of this cycle. These factors are the reason many are starting to question whether the four year cycle is still relevant.

However, those who focus on historical signals still have reason to believe the cycle remains intact.

We are now exactly 36 months from Bitcoin's last cycle bottom, which lines up with previous timeframes. Bitcoin has retraced over 30% from its all time high, ETF inflows have slowed, and MicroStrategy has ended its six week Bitcoin buying streak.

The big question now being asked across the market is simple, how low can Bitcoin go?

Classic bear market signals have reappeared. Historically these have marked the beginning of prolonged drawdowns and crypto winters. Bitcoin's near 30% retrace from its October high has triggered a collapse in sentiment. Retail investors have begun panic selling at a loss after buying earlier in the year.

The Fear & Greed Index has remained in extreme fear territory for almost the entire month, with only a couple of short lived breaks above it. This level of sustained pessimism has only been seen a few times before, mid 2022 after Luna collapsed, mid 2021 during a 50% retrace from all time highs, and the March 2020 Covid crash when Bitcoin was at $3K.

While fear dominates the market, this is often where the greatest opportunities lie. For those who understand the fundamentals and look past short term price movements, the current environment looks less like the middle of a bear cycle and more like a major setup for the next move higher. Structural forces are now more relevant than cycle theory alone.

Bitcoin is an asset that thrives on liquidity. It performs best when money is flowing into the economy and people are spending. That happens when interest rates are low or when monetary stimulus returns. So far this year the US has only delivered one rate cut, fewer than most had anticipated. Markets are now pricing in a second cut in December which would bring the 2025 total to two.

Looking ahead to 2026, current probabilities give a 65% chance of at least three cuts next year. Lower borrowing costs would bring more liquidity to the system, which is supportive for Bitcoin.

Interest rates are only one part of the equation. The Federal Reserve also has a major influence through its balance sheet policies. Quantitative tightening drains liquidity from the market and generally weighs on risk assets. Easing does the opposite. Since June 2022 the Fed has been in a tightening phase but as of December 1 that has officially ended. While easing is not expected to begin immediately, the pivot has started and 2026 could see that shift begin in full.

Despite this tightening regime Bitcoin has performed strongly since mid 2022. A shift back to easing would only accelerate the next phase of growth.

These two macro drivers, increasing liquidity and looser monetary policy into 2026, are likely to shape the path ahead. The question now is which narrative will win out: the historic four year cycle or the fundamentally driven macro regime that is now taking centre stage?

The Hidden Hands Moving the Market

For most of Bitcoin’s life governments and large institutions were openly against it. It traded on its own path, following its own internal cycle, as mentioned earlier. But as the asset has matured, it has become increasingly tied to traditional markets and more sensitive to the influence of macroeconomic and political events.

As many of you already know, this year’s price action has been heavily shaped by macroeconomic forces, central bank decisions, and institutional positioning. From the US government’s creation of a Strategic Bitcoin Reserve to rising global trade tariffs and geopolitical tensions, external factors are no longer just noise, they are core drivers. But this month, we saw a return of something that had not impacted markets for over a year: the US government shutdown.

The longest government shutdown in US history is now over. What began in September ended this month in November, and once again it disrupted broader markets, including Bitcoin. During the 43 day shutdown, several key government functions were suspended. The Bureau of Labor Statistics was unable to release critical economic data, leaving the Federal Reserve without the information it typically relies on to guide interest rate decisions. That kind of uncertainty causes hesitation among policymakers and creates nervousness in markets. For assets like Bitcoin, which historically struggle during periods of uncertainty, the effects were felt almost immediately.

The shutdown also had a direct impact on the Treasury General Account, which is responsible for distributing government funds. Between 60 to 70 million Americans were affected, including those receiving food stamps, government contractors, and essential workers. The lack of distributed funds meant that many households were forced to sell assets to meet basic needs. With over $1 trillion sitting idle in the TGA, this disruption removed a major source of liquidity from the market.

Many new investors might overlook the connection between political gridlock and market performance, but these events play a much larger role than most realise. And it is not just the United States driving these dynamics. Japan is just as critical, if not more so, to the global risk asset trade.

Japan is widely seen as the cheap credit engine of the global economy. Institutional investors including banks, hedge funds, and asset managers often borrow yen at ultra low interest rates to invest in higher yielding assets elsewhere. This is known as the Yen Carry Trade. It works as long as interest rates in Japan remain low and bond yields do not rise. But when those yields start climbing unexpectedly, it increases the cost of borrowing, and the trade begins to unwind.

We saw this carry trade unwind mid last year, and signs of it have reappeared this month. During the last unwind Bitcoin dropped 30% as institutions rapidly sold assets to cover yen liabilities. This month Japanese bond yields moved higher again, triggering a similar reaction. That unwinding pressure has been a major driver behind Bitcoin’s poor performance in November.

Both the US shutdown and the yen carry trade are examples of structural market dynamics that most retail investors miss. These are the kind of headlines that many gloss over, without realising how deeply they affect Bitcoin’s price. So while many are focused on the daily chart or waiting for a bounce, the real pressure is coming from much higher up the chain.

November Falls Flat as December Takes the Spotlight

November has historically been Bitcoin's strongest month for average returns, coming in at 40.5% over the last 14 years. But this time around, it did not live up to the hype. Instead of another blockbuster close, Bitcoin finished the month down 17.5%, its second worst November in the last 15 years.

Not only did November close red, but the drawdown also flipped Bitcoin negative for the year. That outcome would have been unthinkable to most if you told them at the start of 2025. The shift has caught many off guard and added another layer of pressure to December.

So now the focus turns to December, and whether it can break the streak of red months, close the year green, and give bulls some momentum heading into 2026. Historically December has delivered an average return of 8.42%, but it has been more of a coin flip in reality, with only seven out of the last fourteen Decembers closing green.

Source:https://www.tradingview.com/x/mT1FubUm/

The chart above highlights the current technical outlook. November only compounded the bearish structure that took hold in October. Bears remain in control of both momentum and market structure, driving lower highs and lower lows and pushing Bitcoin back to levels not seen since April.

From an open just under $110K, Bitcoin dropped as low as $80K and closed at $90K. That kind of range reinforces the idea that this is still a market under pressure. Even if we apply December’s historical average return to current price action, Bitcoin would close the year around $98K, enough to flip 2025 green, but likely not enough to reverse the broader bearish structure or momentum trend.

So for bulls to take back control, it would take a clear breakout and performance that exceeds the historical average.

If the bears remain in charge, we could easily retest April’s yearly low at $74.5K, a level hit on Trump’s Liberation Day earlier this year. That remains a key line to watch on the downside.

December will also be a major month in the macro space. All eyes are on the US Federal Reserve and the Bank of Japan, both of which have the power to move markets in either direction. The Fed will decide on interest rates on December 10, with current odds showing an 88% chance of a 25 basis point cut. That move is likely already priced in but would still be supportive for Bitcoin.

The Bank of Japan is also in focus due to rising yields and the potential unwinding of the yen carry trade. Current probabilities give a 53% chance of no change and a 47% chance of a 25 basis point hike. The last time we saw an unexpected hike from the BOJ, the yen carry trade unwound and Bitcoin dropped 30% within a week.

Both central banks will play major roles in shaping December’s market conditions, and Bitcoin will be reacting to every move.

In the News:

Strategy May Consider Selling Bitcoin:

One of the most well known Bitcoin bulls, Michael Saylor's company Strategy, may now be facing pressure to make a decision that was once considered off the table. CEO Phong Le has stated that the firm would consider selling some of its Bitcoin, but only as a last resort.

This would only happen if Strategy’s stock (MSTR, market cap $50.9B) trades below a 1x multiple of its Bitcoin Net Asset Value, currently sitting at 1.19, and if the company fails to attract fresh capital.

The multiple could fall if Bitcoin's price drops significantly or if MSTR underperforms, causing markets to value the company below the worth of its Bitcoin holdings. While this scenario is not imminent, the fact that selling is even being mentioned marks a notable shift in tone from one of Bitcoin’s most vocal corporate backers.

Japanese Bond Yields Hit Multi-Decade Highs:

The yen carry trade works because of ultra cheap borrowing costs in Japan. But when those costs rise, especially unexpectedly, it forces institutions to unwind the trade by selling risk assets and repaying yen.

In November we saw exactly that. Long term Japanese bond yields surged, with the 10 year yield rising nearly 9% to its highest level since mid 2008. The 30 year yield rose 10% to reach an all time high.

This rapid rise has made borrowing more expensive and triggered early signs of another potential carry trade unwind. As noted earlier, a similar unwind last year led to a sharp 30% drop in Bitcoin as institutions liquidated positions.

December will be a critical month in this story, with both the Bank of Japan’s rate decision and possible currency intervention playing major roles in whether the unwind accelerates or gets delayed.

BlackRock’s IBIT Becomes the Most Successful ETF in History:

BlackRock was once firmly against Bitcoin. Now, less than two years after launching the IBIT Bitcoin Spot ETF, it has become the most successful ETF launch in history and BlackRock’s most profitable ETF product.

IBIT not only broke the record for the largest inflows in its first month, but by October 2025 it was generating an estimated $245 million in annual fees. It has now grown to hold over 3% of Bitcoin’s total supply.

This shift from active opposition to full scale adoption underscores how far institutional acceptance has come and how ETFs have become one of the most powerful forces in Bitcoin’s current cycle.

Market Update:

Here is the fast five of what you need to know about the market in November 2025:

Bitcoin fell 17.5% in November
Ethereum fell 22.2% in November
Solana and Tron both jumped in their rankings, SOL from seventh to sixth and TRX from tenth to eighth
PAXG was a standout, up 6.1% when the majority of the market was red
The total crypto market cap fell by 16.80%

Video of the month:

Saifedean Ammous Bitcoin Amsterdam 2025 Keynote Speech

Education: How Japanese Monetary Policy Impacts Bitcoin

We’ve spoken about how crucial Japanese yields, interest rates, and the yen carry trade are to Bitcoin, but how correlated are they really? Let’s take a closer look.

The relationship between Bitcoin and Japanese bond yields is quite a unique one. In the short term, the correlation tends to be negative. When yields spike suddenly, Bitcoin often sells off. But over the long term, across multi quarter and multi year periods, the trend flips positive.

If you zoom out and compare them since 2020, both Bitcoin and Japan’s 10 and 30 year bond yields have been moving higher overall. That shows a clear long term correlation. However, there have been specific periods where the two have moved in opposite directions.

Source: https://www.tradingview.com/x/1jDETyow/

Since 2020 there have been three clear instances where a sudden spike in Japanese bond yields was followed by a sharp drop in Bitcoin. These occurred in mid 2022, February 2025 and again in November. In each case, yields rose sharply and Bitcoin corrected. On the flip side, in late 2023, yields fell and Bitcoin continued climbing. These periods tend to last one or two months before both assets resume their broader uptrend.

But the more persistent and clearer inverse relationship is between BOJ interest rates and Bitcoin.

For most of Bitcoin’s existence, the Bank of Japan held rates at or below zero. But over the past year, that environment has changed. Bitcoin is now dealing with a completely new macro backdrop that investors have not had to consider before, rising Japanese interest rates.

Source:https://www.tradingview.com/x/9MXHpJmI/

The chart above shows that every time the BOJ has raised rates, Bitcoin has entered a period of weakness. This is largely due to the cost of borrowing yen increasing. As that cost rises, the yen carry trade begins to unwind and large institutional investors are forced to sell risk assets like Bitcoin to close their positions.

We are now approaching another critical moment. The BOJ’s December rate decision is still uncertain, with odds sitting close to a coin toss. The key question is whether the correlation holds. If the BOJ hikes again and the relationship remains intact, Bitcoin may face renewed selling pressure.

While it might not be obvious at first, Bitcoin is heavily tied to Japanese policy. The BOJ plays a huge role in global markets through its position as the world's primary supplier of cheap credit. What happens in Tokyo does not stay in Tokyo, and Bitcoin is one of the first assets to feel it.

Written by Alexandar Artis

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No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

The Rake Review: October 2025

Mon, 03 Nov 2025 12:16:11 +1100

October Brought Lessons and November Brings Opportunity

As has been the case throughout this bull market, October delivered both highs and lows in rapid succession, each one offering its own lesson. A new all-time high was quickly followed by some hard truths for those chasing quick gains.

From All-Time Highs to Hard Lessons

October has built such a strong reputation for Bitcoin performance that it earned the nickname ‘Uptober’ from the crypto community. This year started just as expected. Within the first few days, Bitcoin printed a new all-time high and optimism returned across the board. But instead of pushing higher, the market was met with a brutal reversal that flipped sentiment overnight. What followed was not just a dip, but a historic liquidation event that shook the market and reminded everyone of one core truth in crypto.

Once again, the market served a painful reminder of why leverage should be approached with extreme caution. We have said it countless times and will keep saying it. Most people are better off buying spot, being patient, and letting the market do the work. But still, time after time, traders try to over-optimise, copy trade, or take on leverage thinking they can outperform. Unless you are part of the 0.01% of elite traders who can consistently beat the market, which is unlikely, the smarter move is to focus on accumulation and long-term positioning.

Large liquidation events are not rare. They are part of the game, especially in high volatility markets like crypto. Institutions and market makers know this better than anyone. They use size and timing to push price into high-leverage zones, triggering stop losses and liquidation cascades. Once the books are cleared, price often reverts back to its previous range. These are not fundamental moves. They are mechanical, structured plays designed to exploit retail positioning.

The professional manipulators playbook is simple. Dump the price, trigger liquidations, buy at a discount, then create momentum and exit at the highs. For leveraged investors, it usually ends in a wipeout. For professional manipulators, it is just another opportunity to accumulate or rent seek.

Yes, this wiped out a lot of traders and left a sour taste, particularly for more traditional investors who already view Bitcoin with scepticism. But for those who understand how the market functions, this was just another shakeout. Bitcoin has been through worse. It has survived 85% drawdowns, major exchange hacks, insolvencies, and regulatory crackdowns. Each time, it recovers and continues to grow.

Unlike July, when a Satoshi-era whale dumped nearly $3 billion in Bitcoin and triggered widespread panic, this month’s price action has been far more stable and mature. Sentiment, while cautious, remains constructive. That alone says a lot about how far the market has come.

Despite the severity of the liquidation, we now enter a much healthier backdrop. We have seen rate cuts, progress on the geopolitical front, and continued institutional adoption. Smart money continues to accumulate, not panic.

Bitcoin enters November with strong on-chain fundamentals, a cooling macro backdrop, and one of the most reliable seasonal trends in its favour. Historically, November has delivered an average return of 40.5%, and nine of the last fourteen Novembers have closed green.

October brought records, both good and bad. But now the dust has settled, the opportunity is clear. The conditions are aligning for what could be a very bullish end to the year.

The Shift from Shelter to Opportunity

When it comes to asset allocation, investors have no shortage of options. Most fall into the risk-on category and tend to perform well when macro conditions are supportive. But when sentiment turns, there is often a clear shift into risk-off assets that are perceived as safer havens.

Gold is traditionally seen as the go-to risk-off asset, while the S&P 500 represents a typical risk-on index, made up of equities that benefit from bullish conditions. Bitcoin, however, sits somewhere in between. While it is increasingly being pitched as a hedge, it still behaves like a high-beta risk-on asset, sitting much further down the risk curve.

In last month’s Rake Review, we examined Bitcoin’s correlation with both ends of the market. The conclusion was clear. Bitcoin has little to no correlation with gold and moves more closely in line with the S&P 500.

This year has been unusual in that both risk-on and risk-off assets have performed well. Gold is up 53% year to date, the S&P 500 has gained 16%, and Bitcoin is up 17%. All three have posted new all-time highs, with gold emerging as the clear standout. Its outperformance has been driven by ongoing macro uncertainty, from tariffs and interest rates to conflict in the Middle East. While gold has led the way, risk-on investors have been watching and waiting for capital to rotate back out of gold and into equities, and eventually into Bitcoin.

October showed early signs of that shift. As macro concerns began to ease, including progress on US-China trade tensions, signs of de-escalation in the Middle East, and clearer communication from the Federal Reserve, gold entered a correction. It retraced more than 10% from its all-time high in just over a week. At the same time, equity markets rallied to new highs, suggesting that capital is beginning to move back into risk-on territory.

But Bitcoin remained stagnant. Despite improving conditions, it spent most of the month trying to stay green. This is not unusual. Historically, the rotation begins with flows moving from gold into equities. Only once risk appetite fully returns do funds begin rotating into Bitcoin and the broader crypto space.

For most of the year, the macro environment has been mixed. Sentiment has been fragile and policy uncertainty has kept many sidelined. Yet despite all of this, Bitcoin remains up on the year and has posted several new highs, all without a major rotation into the asset.

Now, with geopolitical risks cooling, macro clarity improving, and Bitcoin entering its historically strongest month, the setup is there. November could be the point where the larger rotation finally moves into crypto.

From Setback to Setup

October got off to a strong start. Bitcoin hit a new all-time high and was up 10% within the first five days, living up to the hype of ‘Uptober’. Momentum was building, and expectations were high. However, things quickly turned. After a brief period of consolidation, Trump announced new tariffs on China, and within minutes, $20 billion in open interest was liquidated. Bitcoin dropped from $117,000 to $102,000 in under 20 minutes.

The event shattered any bullish momentum. The rest of the month became a grind. Retail and institutional players largely stayed on the sidelines, while those caught in the liquidation cascade tried to leverage their way back in – and were wiped out again. Volatility remained high, but most daily moves reversed by the end of each session, creating choppy, directionless price action.

By 31 October, Bitcoin had failed to deliver on ‘Uptober’s’ promise. Despite setting a new all-time high early on, the month closed down 3.79%. There were multiple bullish attempts as sentiment began to turn – fuelled by the anticipation of an interest rate cut, optimism around a resolution in the US-China tariff standoff, and capital beginning to flow back in as gold corrected. But every rally attempt was knocked back by fresh headlines, the most damaging being Jerome Powell’s hawkish tone following the 25 basis point cut.

Still, throughout the month, we highlighted the broader opportunity. Weakness and underperformance created space to accumulate before what is historically Bitcoin’s strongest month – November. Over the past 14 years, nine Novembers have closed green, with an average monthly return of 40.5%.

Source: https://www.tradingview.com/x/NRlZdWa2/

While October ended in the bears’ favour, the bulls have built a foundation for a potential November breakout. The bullish fair value gap, which acted as deeper support, has now been filled and offered the relief needed to stabilise price action heading into the new month.

Looking forward, if we take the historical November average and apply a 40.5% increase from current levels, Bitcoin could rally towards $150,000. While that scenario remains statistically unlikely – with Kalshi giving it just a 6% probability – it aligns with the 2025 projections many had been making for months. If it were to happen, November would be the month to watch.

The macro backdrop is shifting. A resolution between the US and China now looks to be in place following a key meeting between Trump and Xi, which resulted in a trade deal. Interest rate uncertainty remains the main concern. With the US government still shut down, key data releases remain paused unless further exceptions are granted. However, there is growing expectation that the shutdown will end in November, potentially unlocking the economic data needed to guide the Fed's final rate decision in December.

In the News:

Morgan Stanley Recommends Crypto Allocations:

On 5 October, Morgan Stanley's Global Investment Committee advised clients to allocate up to 4% of "opportunistic growth" portfolios and 2% of "balanced growth" portfolios to digital assets. This guidance, which impacts over 16,000 advisors managing $2 trillion in assets, marks a significant moment for institutional adoption. It reflects growing confidence from TradFi, especially on the back of Q3’s $3.9 billion in unrealised Bitcoin gains for firms like MicroStrategy. The move signals continued diversification into crypto as a potential hedge against inflation.

Interest Rate Cut and the Road Ahead:

We saw the second interest rate cut of the year take place, this time by 25 basis points, bringing the current target range to 4.00%–4.25%. The timing of the decision was complex. With the US government shut down throughout October and likely to remain so, key data the FOMC typically relies on was unavailable. An exception was made for CPI inflation data, but broader economic inputs were missing. Jerome Powell acknowledged that this made the policy decision more difficult, though the committee ultimately moved ahead with the 25 bps cut.

Markets had been split on whether we’d see 50 or even 75 bps of total easing between now and December. However, Powell’s hawkish tone during the press conference shifted expectations. His comment that “a further reduction in the policy rate at the December meeting is not a foregone conclusion” spooked investors. As it stands, markets are pricing in a 68% chance of a 25 bps cut in December, with a 32% chance of no change.

October’s Cryptocurrency ETF Momentum:

October was a breakout month for crypto ETFs. Bitwise launched its Solana Staking ETF, while Canary Capital listed both a spot Litecoin ETF and a spot Hedera ETF. Meanwhile, 21Shares filed for a spot Hyperliquid ETF. The uptick in both filings and listings, particularly across altcoins, continues to legitimise the sector and signals increased institutional interest beyond just Bitcoin and Ethereum. As the ETF landscape broadens, so does crypto’s foothold in traditional finance.

Market Update:

Here is the fast five of what you need to know about the market in October 2025:

Bitcoin fell by 3.79% in October
Ethereum fell by 7.64% in October
The top 10 remained unchanged from last month
Bittensor (TAO) was a standout performer of the month, up 38% for the month
The total crypto market fell by 5.50%

Video of the month:

Charles Hoskinson Keynote at TOKEN2049 Singapore 2025

Education: The Painful Truth About Leverage

Now this may seem like a familiar topic, and it is, but it remains one of the most important lessons in this market. Unfortunately, it is also the one most traders seem determined to ignore until it is too late. The consequences are rarely small. Portfolios get wiped, capital evaporates, and lessons are learned in the most unforgiving way possible.

This month was a sharp reminder of that reality. Over $20 billion in open interest was flushed out of the market in a single day. That figure is not a typo. It was one of the largest liquidation events we have seen in recent memory, and it unfolded fast. Overleveraged long positions were caught completely offside, with cascading liquidations driving prices down across the board and wiping out billions in unrealised gains.

Events like this show exactly why we continue to push the message of buying spot and keeping leverage to a minimum. It is not about being risk-averse. It is about understanding that leverage adds a layer of complexity that most are not equipped to manage. It amplifies your exposure, but also your risk, your margin for error, and your emotional response. In markets as volatile and fast-moving as crypto, that is a dangerous cocktail.

Using leverage means you are not just predicting direction. You are predicting the timing, the size of the move, and the reaction of other participants. You are betting against time, liquidity, volatility, and even platform stability. All of those variables can turn against you in a flash. And when they do, they do not just dent your PnL. They close your positions and leave you sidelined.

A sharp wick down can liquidate a well-placed long before the market even bounces. A funding rate spike can skew your entry. A flush in open interest can trigger a domino effect that wipes out hundreds of millions in positions. These are not rare events. They are baked into how the market functions.

The hard truth is that most traders simply do not need leverage. If you are bullish, buy spot. If you believe in an asset, hold it. Building wealth in this space does not require 10x or 50x leverage. It requires patience, capital preservation, and a clear head. The obsession with maxing out position size is what gets people rekt. You only have to get it wrong once.

We broke all of this down in our Thunder Trading article earlier this month. If you missed it, we are including it again here. It walks through the mechanics of what happened, why it happened, and how you can avoid becoming part of the next liquidation wave. We do not rehash content unless it matters. And this one matters.

Too many people lose too much money learning this lesson after the fact. Do not be one of them.

Stormrake returns to the Australian Crypto Convention

We’re thrilled to be sponsoring the Australian Crypto Convention in Sydney on 22 and 23 November. As a sponsor, we’ll have a dedicated booth at the event and invite you to come by, meet the team.

Our Director and COO Bisher Khudeira will be there alongside members of our senior team including our Senior Brokers, Senior Trader, and Senior Analyst, ready to connect and talk all things crypto.

The Stormrake booth will feature a popcorn machine for a quick snack and a live DJ booth to keep the energy high. Contact your Stormrake Broker for details and to secure your ticket.

We look forward to seeing you there.

Written by Alexandar Artis

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The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.

Disclaimer

The Rake Review: September 2025

Wed, 01 Oct 2025 16:12:56 +1000

The Calm Before Q4’s Big Move

September has wrapped up. Bitcoin fought through historical stigmas, liquidations, and manipulation to close green. A new narrative dominated headlines and shook the space, while fresh signs of adoption continue to emerge. Through it all, Bitcoin held firm and September has now set the stage for October.

Driven by Expectations and Historical Patterns

We’ve just wrapped up Bitcoin’s historically worst month of the year, September. And much like the rest of 2025 so far, it was mixed. Both bulls and bears had their moments in the sun, but by the end of it, Bitcoin once again fought its way back on top.

The dominant narrative this year has been interest rates. Off the back of 2024, where we saw a full 100bps cut between September and December, markets began pricing in the potential for up to five rate cuts in 2025. That idea fuelled rallies across all risk-on assets. Fast forward to today, and with only two decisions left on the calendar, it’s clear there won’t be five cuts. But despite that, markets have still pushed to new all-time highs across multiple sectors.

After months of pressure, including criticism from the US President, Powell and the Federal Reserve finally made the call to cut rates. While the actual cut didn’t move price much on the day, the signal was loud and clear. The door is now open. We already saw a preview of this at Jackson Hole in August, where Powell hinted at a shift in policy for the upcoming September meeting. Markets responded with strength. With two more cuts still expected, the final quarter of the year could carry serious potential for further all-time highs and broad risk-on strength.

When it comes to price manipulation, Bitcoin is no stranger. Large exchanges and institutions regularly push price in a certain direction to trigger liquidations on leveraged positions. This is often done to collect additional fees or to drive price lower for better entries before a reversal. These moves aren’t sustainable because they’re not driven by genuine buying or selling interest. Instead, they’re often triggered by large players temporarily moving price to force liquidations, not to establish long-term positions.

Over the past year, we’ve seen several brutal liquidation days, mostly targeting overleveraged longs. While 2025 hasn’t seen as many as previous years, December 2024 still had multiple days with over $1 billion in liquidations. The largest came in at $1.8 billion, which triggered a 6% drop in Bitcoin. Fast forward to this September, we saw two more days in the same week with over $1 billion wiped from the market. The biggest was on the 22nd, when $1.7 billion was liquidated. But this time, the reaction was far more muted. Bitcoin dropped less than 2.5%.

To put that into context, the FTX collapse in 2022 triggered $1.5 billion in liquidations over six days, and Bitcoin dropped nearly 30%. That comparison highlights how far the market has matured. Institutional adoption and deeper liquidity mean that multi-billion dollar liquidation events now have a reduced impact on price.

As Bitcoin continues to grow, these events will likely have less and less influence on daily price action. But manipulation will always remain. The main takeaway is that these liquidation pullbacks continue to present prime opportunities to accumulate. Because no matter how wild things get in the short term, Bitcoin’s long-term direction hasn’t changed — it still moves up and to the right.

Bull Markets Are Fuelled by Narratives

Bull markets are driven by narratives, whether in crypto or traditional markets. These narratives can be sector-focused or broad market-wide themes, but they all drive price action. Investors chase the hottest stories, and that chase fuels momentum and outsized performance. Once one narrative fades, another takes its place. It’s a cycle within a cycle.

Some of the strongest bull markets have been powered by genuine macro narratives. In 2021, we saw the post-pandemic stimulus era take hold. Government handouts and free-flowing capital didn’t just pump stock and crypto markets — they sent everything into bull mode. The current bull run, while slightly different, is no less powerful. Some argue it’s a tech and AI-driven rally in traditional markets, while others point to Bitcoin’s breakout being led by institutional adoption. Both are true, but the foundation of this entire move is simple: the money printer is back, inflation remains sticky, and investors are looking for alternative vehicles to generate returns and preserve wealth.

The bull run out of the pandemic and the current one share a common core — easy money and systemic macro pressure. As Bitcoin matures, its correlation with these broader macro themes continues to strengthen.

Not every narrative is shared across asset classes. That’s nothing new. Narratives have always defined market cycles, and the history of the S&P 500 is proof of that. Bitcoin is still young and hasn’t lived through even a fraction of what traditional markets have experienced. Traditional markets have seen cycles shaped by tech dominance after the GFC, the Dot-Com boom, post-war economic expansions and the Reagan bull market. Even now, gold is leading in performance and that strength is flowing into gold miners and related equities.

Crypto has had its own defining cycles too. In 2013, Bitcoin’s “digital gold” and “safe haven” status took off during the Cyprus banking crisis. Google searches spiked 10x, and Bitcoin rallied 5x on the back of it. In 2017, the ICO craze drove altcoins and Ethereum to dizzying heights.

This current crypto bull run has had no shortage of narratives either. It started with the Bitcoin ETF rumours and eventual approvals, which helped drive further institutional adoption. Then the narrative shifted to inflation and the macro setup. From there, sector-specific rallies began to break out. Solana pushed to new highs off the back of the memecoin casino in January. AI-focused projects like FET (now ASI) and Bittensor (TAO) caught strong bids. Ethereum and its broader ecosystem also saw renewed attention as institutions began building and adopting ETH-native infrastructure.

And then came a new narrative.

The headlines in September were dominated by one theme — Decentralised Exchanges (DEXes). Earlier in the year, Hyperliquid launched its token and quickly made waves, establishing itself as a top 20 crypto by market cap and capturing a large share of onchain DEX users. But September saw a shift. Aster, a new DEX built on Binance Smart Chain and backed by major players in the space, exploded onto the scene.

The result was a major user migration from Hyperliquid to Aster as the hype built. ASTER rallied from under $0.02 to over $2.40 in under two weeks, while HYPE fell over 30% after setting a new all-time high earlier in the month. Aster’s explosive launch also had a ripple effect on BNB, the native token of Binance Smart Chain, which hit an all-time high off the back of increased onchain activity.

The question now is whether Aster can hold the momentum. Hyperliquid has already established itself as a long-term player. If Aster can maintain its user base and liquidity, it could shape up to be the one-two punch in the DEX space.

This was a clear sector-driven narrative within the broader market. Looking ahead, the next narrative is already forming — interest rate cuts and the historical strength of Q4, which has consistently been the most bullish quarter for risk-on assets.

September Holds Strong, Uptober Now in Focus

Heading into September, Bitcoin was under pressure. Bears were out in force, calling for the end of the bull market, and history was on their side. September is Bitcoin’s worst-performing month on record. Most would have bet on a red monthly close. But once again, Bitcoin proved the doubters wrong, closing the month green and up 5%, despite late-month pressure from liquidations and expiring options.

Even with that bearish backdrop and sentiment, Bitcoin held its ground. Now it is preparing for the most bullish period of the year — Uptober and the fourth quarter. October ranks as Bitcoin’s fourth-best month by average return at 15.2%, but it stands out as the most commonly green month, with only four red Octobers since 2011.

In addition to seasonality, October is expected to bring the penultimate rate cut of the year. As of writing, there is a 90% chance of a 25 bps cut. While the market may already be anticipating it, the fact that it is happening adds another bullish catalyst to what is shaping up to be a strong month for risk-on assets.

Source: https://www.tradingview.com/x/zRfohOjE/

Looking at the current technical picture, Bitcoin is closing out September in a relatively neutral stance. Momentum is sideways, and structure is in no man’s land, with a lower high and a higher low forming the present range. This setup gives both bulls and bears a clean shot at taking control in October. However, historical performance and macro catalysts suggest the bulls are more likely to come out on top. If Bitcoin simply matches its average return for October, price would break to a new all-time high above $131,000.

Although September may have felt like a flat or slightly bearish month, the reality is that it was quietly bullish. And now, as we enter the most favourable time of the year, the opportunity is still there. Bitcoin is trading at a near 10% discount from its all-time high, and many altcoins are offering even deeper discounts.

You do not want to be caught bearish or sidelined going into this stretch. Time and time again, investors who wait end up buying higher or missing the move altogether. The setup is clear, and the playbook has not changed.

And we have not even talked about November yet. With an average return of 40.5%, that discussion is for the next Rake Review

In the News:

FTX Creditor Payouts Underway at Discounted Rates:

FTX has announced the third round of creditor repayments, with $1.6 billion set to be returned to users. These repayments are based on the 2022 valuations of the lost assets, not current market prices.

To illustrate:

Bitcoin: $30,000 per BTC
Solana: $30 per SOL
Ethereum: $3,900 per ETH

This means anyone who lost 1 BTC will only receive $30,000, even though Bitcoin trades significantly higher today. For Bitcoin and Solana holders, the haircut is substantial. Ethereum holders are slightly better off, given ETH has largely moved sideways over the past few years.

What matters now is what recipients decide to do with the funds. Some may take the opportunity to re-enter the market, others may remain in cash. Either way, this fresh injection of liquidity has the potential to act as a tailwind for crypto. If even a portion of that capital flows back into Bitcoin or the broader market, it could help sustain the momentum heading into Q4.

Wall Street Embraces Tokenisation:

NASDAQ has announced that it has filed with the US SEC to allow tokenised trading of stocks and ETFs. This move has sparked a wave of optimism, providing confidence that traditional finance is beginning to incorporate Web3 elements into its offerings.

Tokenised equities would allow investors to purchase fractions of stocks, similar to how one can buy fractions of a Bitcoin. This is a key barrier being removed for smaller retail investors. If approved, this would further legitimise the crypto space and open the door for deeper institutional and traditional flows into digital asset ecosystems.

The pendulum has now swung the other way and there may be no turning back. If this gets the green light, expect a strong move in crypto markets as this narrative shift takes hold.

US Government Shutdown Imminent Amid Political Deadlock:

The month looks set to end with a US government shutdown, following stalled bipartisan negotiations over spending cuts, border security, and policy amendments. No continuing resolution has been passed, and prediction markets are now pricing in an 85% to 86% chance of a shutdown as lawmakers return to Capitol Hill amid heightened political tension.

A shutdown is a partial halt of non-essential federal operations, triggered when Congress fails to approve funding legislation. So what does this mean for markets?

Risk-on assets may face heightened volatility due to increased uncertainty, while risk-off assets such as gold are likely to benefit and rally. The real question is how Bitcoin reacts. Will it behave like a risk-on asset and see volatility, or will it begin to attract capital like a risk-off hedge and see an influx of liquidity as investors look to reduce exposure elsewhere?

Market Update:

Here is the fast five of what you need to know about the market in September 2025:

Bitcoin increased by 5.21%
Ethereum decreased by 4.43%
The top 10 remained unchanged from last month
BNB was the top performer in the top 10, climbing nearly 20%
ASTER exploded onto the scene and quickly became a top 50 crypto project

Video of the month:

Michael Saylor on Bitcoin & Credit Markets: Bitcoin Treasuries Unconference Full Panel and Q&A

Education: Bitcoin’s Correlation: Gold, Equities, or Its Own Path?

There are several conflicting views when it comes to Bitcoin and what it actually tracks in the broader market. Some refer to it as ‘Digital Gold’, positioning it as an alternative safe haven asset, while critics label it the ‘Leveraged Nasdaq’ or treat it as just another tech stock.

So what does Bitcoin really behave like? Is it a risk-on or risk-off asset, or does it move entirely on its own terms? Let’s break it down.

Correlation in this context is measured as a 120-day rolling correlation. A value above 0 indicates a positive correlation, meaning both assets tend to move together. A value below 0 signals a negative correlation, where the assets move inversely.

Bitcoin and Gold

Let’s start with gold, given Bitcoin’s nickname.

Despite often being referred to as ‘Digital Gold’, the two assets have rarely moved in tandem over Bitcoin’s lifecycle. The highest recorded correlation between them came during the pandemic, where it peaked at 0.5. During that period, Bitcoin rallied 400% while gold climbed 67%, as investors fled to inflation-resistant assets.

Since then, however, the relationship has faded. Today, the correlation hovers between 0 and 0.1, and the long-term average since Bitcoin’s inception is close to 0. In short, the two assets rarely move together, despite the narrative.

The divergence has been especially clear in 2025. Gold is up nearly 50% year to date, solidifying its status as the world’s hedge asset. Bitcoin, meanwhile, has spent much of the year consolidating. The market still appears to classify Bitcoin as a growth asset, while gold remains the preferred hedge.

Bitcoin and the S&P 500

In Bitcoin’s earlier years, especially pre-pandemic, its correlation to the S&P 500 was minimal, and at times even negative. It moved largely on its own, often dictated by crypto-native catalysts such as the Mt Gox collapse, regulatory crackdowns from China, and market cycles driven by halving events and ICOs.

That changed during the pandemic. As central banks flooded the economy with stimulus, asset classes began to move together, and Bitcoin’s correlation with equities climbed. The peak came in May 2022 during a wave of rate hikes and geopolitical shocks, including the conflict in Eastern Europe, where both Bitcoin and the S&P 500 dropped sharply. At that point, correlation reached 0.68.

Unlike its relationship with gold, Bitcoin has maintained a moderately strong correlation with equities as it continues to mature. Institutional adoption has increased, and Bitcoin now reacts more consistently to traditional macro events. As of today, the correlation with the S&P 500 sits around 0.5.

Although the S&P 500 pushed to new all-time highs throughout September while Bitcoin moved sideways, the 120-day rolling correlation remains intact. If Bitcoin catches a bid in October, we could see that connection strengthen again.

Bitcoin Is Maturing, but Not a Hedge Yet

For most of its life, Bitcoin moved independently from both traditional equities and hard assets. But as the asset has matured, its relationship with equities, particularly the S&P 500, has become more apparent. Bitcoin now reacts more predictably to macro headlines like inflation, interest rate decisions, tariffs, and geopolitical conflicts.

That said, Bitcoin still has its own isolated catalysts — whether it is ancient wallets moving, major project failures, or sudden surges in institutional or government adoption. These are unique to the crypto space and can drive movement independently from traditional markets.

However, when it comes to broader market forces, Bitcoin currently behaves more like a risk-on asset. While the ‘Digital Gold’ narrative remains aspirational, and may eventually become reality, for now Bitcoin is more closely tied to equity market sentiment than it is to gold.

Written by Alexandar Artis

Start Your Brokerage Account

Get Started

If you enjoyed this Rake Review, feel free to open an account and gain access to more proprietary research and work with your very own dedicated crypto broker.

No Advice Warning

The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.