Bitcoin suffers a heavy loss compared to the stock market! Analyst: Don't wait for the gold rotation, funds may no longer come

Analyst Benjamin Cowen warns that Bitcoin may continue to underperform the stock market, and the expected rotation into gold and silver may not materialize. Gold hits $5,608 and silver $121, reaching new highs, while BTC has fallen 6.12% this month, with the Fear Index at 16. Swyftx’s Hundal states that the historical lag is 14 months, with a bottom expected in February or March. Bitwise reports that Bitcoin’s discount is severe, and a reversal could occur in Q1.

Cowen Throws Cold Water: Gold Rotation Might Be an Illusion

(Source: CMC)

Cowen suggests that the downward trend in Bitcoin’s price may not be as short-lived as many holders expect. In a video on Thursday, he said: “Bitcoin may continue to decline and underperform the stock market.” He also added that the strong expectation of a large-scale rotation from precious metals like gold and silver into cryptocurrencies may not be realistic.

Data from Trading Economics shows that gold and silver prices recently surged to historic highs of $5,608.33 per ounce and $121.64 per ounce, respectively. Citibank forecasted Tuesday that, driven by Chinese demand and the dollar falling to a four-year low, silver could rise to $150 per ounce within the next three months. However, Cowen emphasizes that, in the short term, capital “may not shift into Bitcoin.”

This view challenges the mainstream narrative in the crypto community. Many in the crypto market are betting that gold and silver will hit all-time highs, believing history will repeat itself and Bitcoin will eventually follow. In past cycles, precious metals rose first, then capital rotated into Bitcoin, reinforcing this pattern and convincing many investors that this time will be no different. But Cowen’s warning suggests that market structures may have changed, and historical patterns may not repeat.

According to CoinMarketCap, at the time of writing, Bitcoin’s trading price is $82,859, down 7.78% over the past seven days. Meanwhile, overall market sentiment remains weak. The Crypto Fear & Greed Index shows a score of 16, indicating “Extreme Fear,” suggesting investors are very cautious about the crypto market.

Cowen’s reasoning may be based on several key observations: first, the current rise in precious metals is mainly driven by safe-haven demand rather than liquidity improvements. In a risk-averse environment, capital tends to flow into traditional safe assets like gold rather than highly volatile assets like Bitcoin. Second, the changing priorities in institutional allocations, as gold ETFs and traditional safe-haven tools become more attractive, may reduce Bitcoin’s priority in institutional portfolios.

Hundal Counters: History Shows 40-Day Bottom in Bitcoin

However, other analysts are more optimistic. Swyftx Chief Analyst Pav Hundal told Cointelegraph that the market may be approaching a turning point, saying: “We are on the edge of a traditional risk-reinvestment cycle into Bitcoin.”

“Historically, Bitcoin’s bottom always lagged about 14 months behind gold’s relative strength,” Hundal explained, adding that he expects this rotation to occur in February or March. “If history repeats (which is just an assumption), the trend of gold and Bitcoin suggests that Bitcoin’s price could bottom and rebound within the next 40 days,” Hundal said.

Hundal emphasized that during macroeconomic stress periods, gold usually leads the price rally, and once risk appetite recovers, Bitcoin follows. “If this model holds, by the end of this quarter, the tape should look less fragile,” he said. This historical cycle analysis offers hope for Bitcoin holders, but the key assumption is “history will repeat.”

Core Disagreements Between the Two Analysts

Cowen’s Pessimism: Precious metals rise driven by safe-haven demand, funds won’t rotate into high-risk Bitcoin

Hundal’s Optimism: Historical patterns show Bitcoin lags gold by 14 months; bottom expected in Feb or Mar

Meanwhile, Bitwise Europe Research Director Andre Dragosch posted on X on January 19 that Bitcoin is “significantly discounted relative to gold.” “This asymmetric situation is very rare,” he said, “and if the flow direction shifts, Q1 2026 could be a turning point.”

Dragosch’s view offers a third perspective: Bitcoin’s current undervaluation may create value investment opportunities. If the Bitcoin-to-Gold ratio reaches extreme historical levels, a shift in market sentiment could lead to significant upside for Bitcoin. This valuation-based analysis contrasts with Cowen’s sentiment view and Hundal’s cycle analysis, forming three different interpretative frameworks.

Decoupling or Correlation Between Bitcoin and Stocks

Cowen’s core argument is that Bitcoin will continue to impact the stock market, implying that their correlation may be changing. Historically, Bitcoin’s correlation with stocks (especially tech stocks) has fluctuated. During periods of abundant liquidity, they tend to move together, seen as risk assets. But under extreme market conditions, Bitcoin sometimes exhibits safe-haven properties and decouples from stocks.

The current environment is more complex. Stocks are under pressure due to poor tech earnings and macro uncertainties but haven’t entered a full bear market. Bitcoin, meanwhile, has declined due to regulatory uncertainties, ETF outflows, and waning retail demand. In this context, “Bitcoin impacting stocks” could mean that weak Bitcoin performance drags down crypto-related tech and financial stocks, or that Bitcoin’s decline triggers broader risk asset sell-offs.

Alternatively, if Bitcoin bottoms and rebounds in February or March, it could boost stock sentiment, seen as a sign of improved liquidity and risk appetite. The relationship between Bitcoin and stocks is not one-way; it is a complex dynamic of mutual influence.

For investors, this debate among analysts highlights the high uncertainty in the current market. Cowen’s warning reminds not to blindly trust historical patterns; Hundal’s optimism offers a potential rebound scenario; Dragosch’s valuation analysis hints at long-term opportunities. The truth may lie somewhere among these perspectives, and the market will reveal its direction in the coming weeks.