Expected Decoupling Fails: Why BTC Returns to the Shadow of US Stocks Amid the AI Sell-Off Wave
Author: Cathy, Baihua Blockchain
The best day and the worst day for US stocks this year were separated by only 24 hours, and BTC followed on both days.
On Nov 4, the Dow Jones Industrial Average rose 3%, and BTC rebounded to $81,000. On Nov 5, the Nasdaq closed down 5.5%, and BTC fell back to $75,200. What dragged it down wasn't an on-chain crisis, but an AI-related sell-off. Just two months ago, Grayscale claimed that BTC was decoupling from tech stocks and turning toward gold, only for the correlation to snap back.
How an AI Sell-Off Smacked into BTC
The trigger had nothing to do with crypto.
Just the day before had been the best day since April 2025. BTSE Chief Operating Officer Jeff Mei said the market believed the Iran conflict was winding down. Twenty-four hours later, the wind completely changed direction.
According to Reuters, after the Democratic Party took control of Congress, markets worried about a slowdown in data center construction, causing chip stocks to fall starting the previous day, with the fifth marking the second session of declines. The Nasdaq Composite closed down 5.52%, the Dow Jones lost 1,833 points, and semiconductor ETFs dropped over 12%, marking their 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 fundamentals. All 11 S&P 500 sectors declined, and panic spread from chips to everything.
BTC followed along.
Data from CoinGecko shows BTC dropped from around $80,300 at the open to an intraday low of roughly $75,200, closing at $76,000, a decline of about 5.5% from the previous day. Over $1 billion in positions were liquidated within 24 hours, with nearly 90% being long positions, affecting approximately 210,000 traders.
The transmission mechanism isn't complicated: panic in tech stocks leads institutions to dump BTC ETFs, ETF outflows trigger liquidations of on-chain leverage, and prices accelerate downward. Data from Farside shows net outflows from BTC ETFs totaled approximately $1.5 billion between Oct 30 and Nov 5. Oct 30 was also a day of steep tech stock declines, when Intel plunged roughly 29% due to weak guidance, and ETF outflows reached $643 million that same day.
The source of crypto's crash that day was not on-chain.
The Promised Decoupling Reversed in Two Months
In February this year, BTC fell to around $60,000, halving from last October's all-time high of $126,000. In his Feb 9 report, Grayscale Research Head Zach Pandl concluded: For at least the past 12 months, BTC price movements have been highly correlated with early-stage, high-valuation tech software stocks. He argued that this round of pullback was more about broad de-risking across growth portfolios rather than a crypto-specific issue.
By late August, the same person presented a completely different set of data. Over the past three months, the synchronization between BTC and gold price movements rose from near zero at the beginning of the year to over 50%, while its correlation with the Nasdaq 100 actually dropped from over 60% to around 33%. Against the backdrop of US federal debt surpassing $40 trillion in August, market anxiety over debt sent capital flowing toward "scarce assets."
Market interpretation: BTC has finally decoupled from tech stocks and joined the gold camp.
Two months later, K33 Research cast doubt on that narrative. On Oct 21, they found that BTC's synchronization with the Nasdaq had risen again, with two-week returns almost identical. At the time, BTC's 28-day volatility had dropped to 1.2%, near its lowest level of the year. Research Head Vetle Lunde stated that "recent relative resilience does not mean true decoupling from equities," while warning that "volatility compression is usually followed by a breakout."
Then came Nov 5. The Nasdaq 100 dropped roughly 6.5%, BTC fell about 5.5%, while gold actually gained slightly by 0.9%. BTC tracked the Nasdaq, not gold.
This is not the first time.
At the start of 2022, data firm Kaiko already found that BTC's ups and downs were highly synchronized with the Nasdaq, reaching its highest alignment since July 2020. During the same period, BTC's correlation with gold was actually negative. The narrative of "digital gold" was punctured by data for the first time.
During the April 2025 tariff shock, BTC briefly decoupled, rising 13% for the month while the Nasdaq remained essentially flat, a performance Bernstein analysts called "remarkable." However, after the tariff pause, the sync quickly returned. The reference frame for the US stock market crash on Nov 5 is April 2025: facing shocks of the same magnitude, BTC withstood the first but failed the second.
Different institutions measure correlation using different time windows. Grayscale looks at 90 days, while K33 examines two-week returns. Change the window, change the conclusion. It was the same Zach Pandl who said in February that BTC acts "more like a growth stock," and in August that it has "turned toward gold"—the same person saying two different things within the same year.
Correlation is not a conclusion; it keeps flipping on its own.
BTC and Gold Both Finished Last This Year
Creative Planning Chief Market Strategist Charlie Bilello provided an asset ranking chart on Oct 23: Out of 21 asset classes, BTC fell 7.3% for the full year, and gold fell 7.5%, tying for last place. Over the same period, short-term US Treasuries rose 2.9%, and a commodities basket surged 52.5%. Based on the Nov 5 close, BTC's year-to-date decline had widened to approximately 13%.
His commentary: "Since 2011, there has never been a year where BTC and gold finished last simultaneously."
Under traditional understanding, funds should flow into gold and Bitcoin when stocks fall. But this year, both fell together, while crude oil and commodities were the real money-makers. The safe-haven label doesn't play well in an inflationary environment.
Gold hasn't fared much better either. After hitting a historical high of around $5,600 in January, it plummeted to roughly $4,095 by Nov 5, down approximately 27% from its peak.
During the Iranian war in March, oil prices skyrocketed 63%. Inflation fears pushed up US Treasury yields and strengthened the dollar, forcing leveraged traders to sell gold for cash. Gold recorded its worst monthly performance since October 2008. Of the two "safe-haven assets," one was brought down by war.
But in that same March, BTC didn't follow suit. A Grayscale report in April was titled "Resilience Amid War": Major equity indices, bonds, and precious metals all fell, yet crypto saw slight gains. Their explanation was that BTC had already cleared out a significant amount of risk exposure in preceding months, compounded by Strategy buying approximately 44,400 BTC that month, with buy orders propping up the price.
In the same year, BTC avoided falling with stocks in March but tumbled alongside tech stocks again in November. "Digital gold" is not a fixed attribute but more like a state that flips back and forth.
It becomes even clearer looking at the same week. After election results came out on the 4th, BTC rebounded, gold rose about 3%, and the Dow jumped 3%, with all three rising together. On the 5th, the trend reversed: BTC fell roughly 5.5%, the Nasdaq 100 dropped about 6.5%, and gold gained 0.9%. First it rose in sync with all assets, then it fell alone with tech stocks.
What Exactly Is BTC?
On Feb 9, Grayscale Research Head Zach Pandl laid the question bare in a report:
\n"Is BTC a store-of-value asset like gold, or a growth asset like tech stocks? Short answer: We believe it is both."
An honest answer. BTC genuinely oscillates between these two identities, surviving the war shock in March and tumbling alongside tech stocks again in November.
The risk-asset side is easy to see. Following the approval of spot ETFs, institutional capital flooded in, and BTC's trajectory increasingly resembles a high-volatility tech stock. When the broader market rises, BTC rallies harder; when it falls, BTC crashes even fiercer.
The numbers are straightforward. On Oct 30, during the tech selloff, BTC ETFs saw net outflows of $643 million; on Nov 5, another drop triggered over $430 million in outflows. Every shift in institutional stance gets transmitted directly to BTC prices via ETF flows.
Grayscale also put forward a point prior to the election: Only about 15% to 20% of global crypto activity takes place in the United States, and crypto will move forward regardless of election outcomes. But the Nov 5 price action demonstrates that sentiment from the US market can still transmit through ETFs to global BTC prices.
The store-of-value aspect requires a longer timeframe. Bilello's data shows that since 2011, BTC's annualized return has been 120.6%, compared to just 6.3% for gold. Strip away short-term volatility, and BTC's inflation-beating performance far exceeds gold's.
Even JPMorgan is beginning to take notice. In October, they incorporated BTC into their long-term capital market assumptions for the first time, setting a baseline annualized return of 10% for the next decade, surpassing the 7.5% for US large-cap stocks. However, JPMorgan kept one foot on the brakes: with 55% volatility and unstable correlations, they did not include BTC in their primary portfolio models.
Pandl also wrote in that February report: "If BTC achieves long-term success as a monetary asset, its price behavior may eventually come to resemble gold."
Note that "if." BTC has only a 17-year history and has not yet attained the status of gold.
Three metrics deserve ongoing monitoring:
17 years is simply not enough time for it to mature into itself.