What Conditions Does Bitcoin Still Need to Rise?

Last night, NVIDIA delivered a splendid report card.

In the third quarter, revenue reached $57 billion, a staggering 62% year-over-year increase, and net profit soared 65% to $31.9 billion. This marks NVIDIA's 12th consecutive earnings beat. Following the financial report, the stock price surged 4-6% in after-hours trading, continued to rise 5.1% in pre-market trading the next day, directly adding around $22 billion to the company's market cap and also lifting NASDAQ futures by 1.5-2%.

One would expect that with such positive market sentiment, Bitcoin, the digital gold, would also bask in some glory. However, reality dealt us a blow — Bitcoin not only failed to rise but instead fell, slipping to $91,363, a drop of approximately 3%.

NVIDIA Surges, Bitcoin Falls?

Those who once viewed Bitcoin as a safe haven asset are now likely feeling uneasy.

Initially portrayed as the "weapon against inflation" and the "safe haven in times of economic anxiety," Bitcoin's current performance resembles more that of a high-risk tech stock rather than a safe-haven asset like physical gold.

The data speaks volumes: after a 26% crash from its historical high in early October, Bitcoin's price has essentially returned to year-begin levels. In other words, it has been a wasted year.

Meanwhile, real gold during the same period surged by 55% in 2025. The psychological gap for Bitcoin holders is indeed substantial.

The factors driving the rise in gold prices are quite clear: potential interest rate cuts, a weakening US dollar, increased market volatility, and uncertain economic prospects. According to traditional Bitcoin logic, these conditions should have also boosted Bitcoin's price. However, the reality is quite the opposite.

Markets economist at CME Group, Mark Shore, pointed out as early as May this year that starting in 2020, the correlation between Bitcoin and US stocks turned positive and has remained so ever since. More importantly, the amount of Bitcoin flowing into the hands of institutional investors over the past year through ETFs and publicly traded cryptocurrency companies has hit a record high.

In other words, Bitcoin is becoming increasingly "mainstream," but the cost is that it is also becoming more like a traditional risky asset.

Of course, one reason for the situation where "NVIDIA surges, Bitcoin falls" lies in the flow of funds.

NVIDIA benefits from the kind of solidified demand seen in the AI sector. CEO Jensen Huang emphasized that "computing demand continues to accelerate," and the newly launched Blackwell chip sales have been "off the charts," with a $500 billion order visibility directly dispelling market concerns about an AI bubble. Super-scale cloud service providers, namely giants like Amazon and Microsoft, have spent over $380 billion in capital expenditures this year, with most of this money flowing to NVIDIA.

And what about Bitcoin? It has suffered a comprehensive blow to risk aversion sentiment. As a "high Beta risk asset," it is at the forefront in an environment of liquidity tightening. In just one week, the decline reached 12.5%. Cryptocurrency ETFs saw a single-day net outflow of $867 million on November 13, as long-term holders started selling, reducing the dormant Bitcoin supply from 8 million coins at the beginning of the year to 7.32 million coins.

So what conditions does Bitcoin still need to rise?

Although the current situation is not very optimistic, there is still room for a turnaround. To make Bitcoin soar again, it may require several key conditions to be met simultaneously.

Liquidity Injection After the U.S. Government Reopens

The 43-day government shutdown officially ended on November 18. This shutdown affected 1.25 million federal employees, resulting in approximately $16 billion in wage losses and causing the consumer confidence index to drop to a three-year low of 50.4.

Now that the government has reopened, liquidity injection has become crucial.

Here is a concept to clarify—the Treasury General Account (TGA), which is the U.S. Treasury's primary operating account at the Federal Reserve. All government receipts and disbursements go through this account. When the TGA increases, it means funds are flowing from the market to the government, reducing market liquidity; conversely, when the TGA decreases, government spending injects funds into the market, increasing liquidity.

According to data, during the 43-day period from October 1 to November 12, 2025, the TGA balance continued to accumulate, reaching a high point of $959 billion on November 14. This level is well above the cash position the Treasury usually maintains, mainly due to restricted spending during the government shutdown and continued debt issuance, leading to a significant accumulation of cash in the Treasury account.

Currently, there is no significant decline in TGA data.

Based on the timing of the government reopening on November 13, 2025, and historical experience, it is estimated that in the first week, government employees will first receive back pay, injecting about $16 billion into the economy, with a relatively minor impact. This means that it will be difficult for a large amount of liquidity to enter before November 20.

Furthermore, in another 1-2 weeks, around early December, as the TGA resumes normal operations, daily government spending resumes, and seasonal tax inflows occur, the TGA balance will begin to fluctuate significantly, and liquidity will be noticeably improved in the market.

With increased interbank liquidity and institutional funding abundance, it means that Bitcoin as a risk asset will also receive inflows of funds, leading to an uptrend.

The experience at the beginning of 2019 provides an important reference point. At that time, the U.S. government also went through a long shutdown from December 22, 2018, to January 25, 2019, lasting 35 days. During the government shutdown, the Treasury General Account (TGA) balance also accumulated significantly, reaching $413 billion on January 29, 2019. When the government resumed operations, the Treasury Department quickly increased spending. From January 29 to March 1, in just one month, the TGA balance decreased by $211 billion. These funds flowed into the financial system, bringing about a significant improvement in liquidity. This drove the stock market and Bitcoin to rise by 8.5% and 35%, respectively, within 30 days of reopening.

Comparing the current situation, the Treasury General Account (TGA) balance in November 2025 reached $959 billion, much higher than the $413 billion in 2019. This implies a potentially more substantial liquidity release.

Fed Policy Shift

Speaking of the Fed, it is another key player influencing Bitcoin's trajectory.

The latest Fed meeting minutes show that officials are divided on whether there is a need for a third consecutive rate cut. Most officials believe that further rate cuts may exacerbate inflation risks. White House economic advisor Hassett even admitted that they had "lost control over inflation."

Trump once again expressed his "incompetent anger," directly attacking Fed Chair Powell, saying, "I'd like to fire him, he's extremely incompetent."

According to CME's "FedWatch," the probability of a 25-basis-point rate cut in December is only 36.2%, while the probability of keeping rates unchanged is as high as 63.8%.

What's worse, the U.S. Bureau of Labor Statistics has confirmed that household survey data for October (used to calculate key statistics such as the unemployment rate) cannot be retroactively collected. Therefore, the October employment report will not be released, and these nonfarm payroll data will be included in the November employment report, which will be published on December 16. This means that the Fed will not have key employment data at its last meeting of the year.

In addition, with U.S. bond yields rising, major treasury bond yields are generally increasing, with the 10-year yield rising by 2.5 basis points. Market expectations for a December rate cut have been largely dashed, with the rate cut probability falling to around 31%.

However, if we take a longer-term view, the situation may not be so pessimistic. The delayed November employment data will be released on December 16, and if the data is weak, it could still support expectations of the next rate cut, around January 27 next year. Currently, the probability of a rate cut is 48%, the highest for the 2026 meetings.

Expanding our view further, although the Fed's stance is ambiguous, other major central banks around the world have already taken action with a dovish bias. This undercurrent may become an important driver of Bitcoin's rise.

For example, the ECB is currently maintaining the deposit facility rate at 2.00%, but there is a high likelihood of a 25 basis point rate cut in December, as inflation has fallen to 2.1%, close to the target level. Here's an interesting fact: historically, there has been a high correlation of 0.85 between ECB rate cuts and Bitcoin's rise. Why? Because the euro area's liquidity easing spills over into global markets, boosting overall risk appetite.

Economic Recovery Is Evident

The current U.S. economy is in a very delicate state—there are bright spots, but also hidden worries.

In August, the trade deficit narrowed significantly, falling 23.8% to $596 billion, exceeding the market's expectation of $610 billion. This was mainly due to a 6.6% drop in commodity imports under the tariff effect. This change is expected to contribute 1.5-2.0 percentage points to third-quarter GDP growth, pushing growth estimates to 3.8%. Sounds good, right? But the problem is, this improvement has come at the expense of imports and may have a long-term impact on the supply chain and consumption.

Although the 43-day government shutdown has ended, the damage it caused is still lingering. $160 billion in wage losses, a consumer confidence index hitting a three-year low of 50.4, and the CBO estimating a 1.5 percentage point loss in fourth-quarter GDP—these numbers reflect the real economic pain.

Food inflation is also critical—what used to cost $100 now costs $250, and the quality is even worse. Just as the egg price surge has eased, Americans' favorite beef is facing a new wave of inflation.

The latest Consumer Price Index (CPI) released on October 24 shows that the prices of roast beef and steaks have increased by 18.4% and 16.6% respectively year-on-year. According to data from the U.S. Department of Agriculture, retail prices for ground beef have skyrocketed to $6.1 per pound, hitting a historical high. Compared to three years ago, beef prices have risen by over 50% cumulatively.

In addition, coffee prices have increased by 18.9%, natural gas prices by 11.7%, electricity prices by 5.1%, and car repair costs by 11.5%. Many American young people who are already in debt due to college education are facing even greater pressure due to further increases in the cost of living.

The "K-Shaped Recovery Warning Sign" may be the most concerning trend in the current US economic situation. Nearly 25% of American households are living paycheck to paycheck, with the wages of the low-income group stagnant, while the AI investment-driven high-income group (which accounts for 50% of consumption) continues to benefit. The risk of economic stratification is rising sharply.

Furthermore, tariff policies continue to drag down the global export-oriented economy, with Japan, Switzerland, and Mexico all experiencing contractions in the third quarter. This global economic chain reaction will eventually circle back to the US market, affecting investors' risk appetite.

However, if the US government can improve the US economy thereafter, various assets, including Bitcoin, will have an opportunity to rise.

Institutional Fund Inflows

If the previous conditions can be seen as "timing," then institutional funds are the "people." This may be the most direct and immediately effective catalyst.

It has to be said that the current data is not very optimistic. From November 13-19, ETFs saw a net outflow of $2 billion (approximately 20,000 Bitcoins), the largest weekly outflow since February of this year. The current Assets Under Management (AUM) stand at $12.23 billion, accounting for 6.6% of the total Bitcoin market cap.

What does this mean? Institutional investors are withdrawing, and at a rapid pace.

After all, in the current macro environment, institutional funds are facing multiple pressures: first, severe liquidity stratification. The tech/AI sector is receiving ample funding, traditional safe-haven assets like gold are performing well, and the liquidity of riskier assets like cryptocurrencies is drying up. The money isn't disappearing, it's just going elsewhere.

Furthermore, the typical behavior of institutional investors and fund managers is often shaped by an "avoiding mistakes" incentive structure. The industry's evaluation system focuses more on "not falling behind peers" rather than "achieving excess returns." Under such a framework, taking risks contrary to mainstream views often carries a much higher cost than the potential gain.

Therefore, most managers tend to maintain a position structure consistent with the market mainstream. For example, if Bitcoin experiences an overall pullback, and a fund manager still maintains a significant long position, the drawdown will be interpreted as a "judgment error," leading to much more criticism than the recognition brought by an equivalent gain. Ultimately, under these institutional constraints, "conservatism" becomes a rational choice.

However, history tells us that institutional money flows often suddenly reverse at a critical point. So where is this critical point? There are three clear signals:

Signal One: Consecutive 3-Day Net Inflow

This is the most important signal. Historical data shows that when ETF funds flow positive and remain in net inflow for 3 consecutive days, Bitcoin tends to rise 60-70% within an average of 60-100 days.

Why is this so magical? Because institutional investment is the area where the "herd effect" is most obvious. Once the trend reverses, subsequent funds will follow like falling dominoes. That's how the bull run at the beginning of 2024 was ignited.

Signal Two: Single-Day Inflow Exceeding $500 Million

This represents a signal of large institutions entering the market. In October 2024, a single-week $3.24 billion inflow directly propelled Bitcoin to break through its all-time high. Retail investors simply cannot generate that kind of momentum.

What does $500 million in a single day mean? It's equivalent to giants like BlackRock and Fidelity simultaneously deciding to increase their positions. Such a level of fund inflow often comes with a clear macro judgment – they see signals that ordinary investors cannot.

Signal Three: AUM Percentage Rebounds to Over 8%

The current $122.3 billion AUM accounts for 6.6% of Bitcoin's market value, a ratio that historically has been on the lower side. During the peak of 2024, this ratio reached 8-9%. When this proportion starts to rise, it means that institutions are not only buying Bitcoin but are buying at a pace faster than the Bitcoin price is rising.

So, under what circumstances will institutional funds return?

Basically, as mentioned earlier: a clear Fed interest rate cut signal appears; U.S. economic data becomes clearer; global central banks coordinate loosening policies to resonate; technical breakthrough past key resistance levels, and so on.

Possible Timing of Upsurge

After discussing these conditions, perhaps what everyone is most concerned about is: when will the surge happen?

While no one can accurately predict the market, based on the timetable of macro events, we can pinpoint a few key points.

December 10: FOMC Meeting

This is the final Fed meeting of the year and the most anticipated event in the market.

If there is indeed a rate cut, Bitcoin may experience a surge; if not, there might be another dip.

Here's a crucial point: even if there is no rate cut, if the Fed sends a dovish signal (such as emphasizing "flexibility" and "closely watching employment data"), it will also support market sentiment. On the other hand, if there is no rate cut and a strong stance is taken, be prepared for short-term pressure.

December 16: Delayed November Employment Data

This data will include a full picture of both October and November, confirming the true trend of the labor market.

If the data for two consecutive months is weak, the probability of an interest rate cut in early 2026 will significantly increase. This will provide mid-term support for Bitcoin. If the data is mixed or contradictory, the market may continue to struggle, and a range-bound pattern will persist.

The certainty of the data release is high, but the quality of the data itself may be less reliable (government shutdown leading to statistical confusion), so market reaction may be more based on interpretation rather than the data itself.

Late December to Year-End: Liquidity's "Traditional Peak Season"

This is an interesting seasonal pattern. Historically, from late December to the New Year, institutional investors will conduct year-end rebalancing, and reduced holiday trading volume will amplify price volatility.

If the preceding events align positively, there may be a year-end "Santa Claus rally." However, beware of the "sell the news" effect—profit-taking after positive news is priced in.

First Quarter of 2026: Global Liquidity's Synchronized Easing "Grand Game"

This is the most imaginative time window.

If the Federal Reserve cuts interest rates in December or January next year, and the ECB and PBOC continue to maintain loose monetary policies, a situation of synchronized global liquidity improvement will emerge. In this scenario, Bitcoin may see a rally similar to the one in 2020—rising from a low of $3,800 in March to $28,000 by the end of the year, a surge of over 600%.

Of course, it is unlikely that 2026 will fully replicate 2020 (the stimulus intensity during that time was rare due to the pandemic), but the combination of globally coordinated central bank easing, TGA fund release, and institutional funds inflow is enough to drive a decent rally.

The likelihood of synchronized global liquidity easing is moderately high (60-65%). Central banks around the world are facing economic slowdown pressures, and easing is a high-probability event.