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“Hot Money” Has Left the Crypto Market. Why Bitcoin Is Not Rising Like Stocks
Against the backdrop of growth in the main stock indices of major equity markets, bitcoin’s performance is lagging significantly. Experts have linked this to record capital outflows from exchange-traded funds and a shift in investor interest towards the AI sector.
Bitcoin investors are going through a period of calm: traders expect the price volatility of the first cryptocurrency to fall to its lowest level since the summer of 2025. At the same time, record capital outflows are being observed from bitcoin-based exchange-traded funds (ETFs), while bitcoin is trading 40% below its all-time peak. Stock indices of the largest companies in the United States and Asia are hitting records amid a simultaneous outflow of retail investors from the crypto market.
As of 26 May, the price of bitcoin ($BTC) stands at $76,500 per coin. Since the end of March, $BTC had been rising almost without corrections from the $65,000 mark and temporarily reached $83,000 by early May. The current price level is almost 40% below the historical peak of around $126,200 recorded in October 2025.
Experts believe that the outflow of retail investors from the crypto market is explained precisely by the fact that bitcoin volatility is approaching historical lows. As Caroline Mauron, co-founder of Orbit Markets, a company specialising in cryptocurrency options, stated, they are leaving to look for trading opportunities in other markets.
The Bitcoin Volmex Implied Volatility Index fell to 36.11 points during trading on 26 May, according to Bloomberg. This is the lowest value in the past nine months and is also close to the record-low levels observed in 2023.
Implied volatility is a market estimate of how much the price of an underlying asset, such as a stock or cryptocurrency, will change in the future. It reflects not factual data based on the past, but investors’ expectations. The index is calculated on the basis of derivatives, such as options, using mathematical models, and shows the current market consensus regarding future risks. The version of the index cited by Bloomberg reflects traders’ 30-day expectations based on real options transactions.
Why Bitcoin’s Price Is Not Rising
The main puzzle in bitcoin’s current price dynamics is the divergence between the movement of $BTC and traditional “risk” assets, such as stocks. As Bloomberg noted, while global markets are rising amid expectations of a quick end to the conflict between the United States and Iran, as well as the continuing boom in the artificial intelligence sector, bitcoin is not following the broader market trend. For example, the US stock indices S&P 500 and NASDAQ 100 are less than 1% away from their all-time highs, while the indices of the South Korean and Taiwanese stock exchanges are setting new records.
According to the experts cited by Bloomberg, the reason for this imbalance is a shift in speculators’ priorities and, consequently, a flow of capital into shares of chipmakers and AI-related companies. As a result, there is less “hot money” in cryptocurrency.
This is confirmed by capital outflows from bitcoin ETFs, where net outflows since May have amounted to around $1 billion, breaking a two-month streak of capital inflows. This is particularly striking against the general optimism in stock markets, as well as the fact that bitcoin is usually classified as a “risk” asset, like stocks, because of its historically high price correlation with them.
On the other hand, analysts believe that low volatility is not only a consequence of a lack of interest in bitcoin, but also the result of a particular investment strategy. As soon as bitcoin’s price attempts to start rising, market participants immediately use this to “sell volatility”.
Holding bitcoin in itself does not generate any yield for its holders, unlike bonds, for example. The experts cited by Bloomberg point out that miners, investors and large funds use derivatives to earn money from volatility and market expectations: a rise encourages major players to sell options, which effectively insure their positions against sharp moves while also allowing them to earn a premium. To hedge risks, they keep the price within a narrow range, which leads to a decline in the volatility index.
This strategy is fairly popular in the crypto market, and major holders of the leading cryptocurrency use a similar way of earning income. For example, the Japanese investment company Metaplanet earned around $58 million in the first quarter thanks to income from options on the first cryptocurrency. The same strategy is used by the video game retail chain GameStop (GME), which places its bitcoins in the options market through the lending service of the Coinbase crypto exchange.
See also: "Strategy Repurchases $1.5 Billion of Its Own Bonds"
