Schwab Analyst Says Bitcoin's Bear Market Started in October

Bitcoin has fallen more than 16% over the past month even as the S&P 500 has gained 5%, a divergence Charles Schwab attributes less to crypto-specific problems and more to investors chasing opportunities elsewhere. Jim Ferraioli, director of digital currencies research and strategy at Charles Schwab, said Bitcoin's inability to keep pace with U.S. equities comes down largely to a loss of momentum rather than a shortage of positive developments within the crypto industry.

Speaking to crypto media, Ferraioli said Bitcoin has effectively been in a bear market since reaching a new all-time high last year, arguing that the asset has struggled to regain the type of momentum that previously attracted waves of speculative capital. "Bitcoin has been in a bear market since October," Ferraioli said. "Not to say it's as simple as that, but it's kind of simple as that."

Over the past year, the industry has secured spot ETF approvals, attracted billions of dollars from institutional investors and moved closer to regulatory clarity in Washington. Despite those developments, Bitcoin has failed to produce the kind of sustained rally many market participants expected.

Following a rebound from February lows, which Ferraioli linked in part to renewed enthusiasm around institutional adoption and another successful Wall Street ETF launch, buying interest failed to develop into the speculative surge seen in previous market cycles.

Bitcoin now competes with AI and IPO speculation. In Ferraioli's view, the challenge facing Bitcoin is not a lack of bullish catalysts but the growing number of alternatives competing for investor attention. Historically, he said, crypto markets have benefited when digital assets represented the most attractive speculative opportunity available. Once another theme begins generating stronger returns, capital often follows.

"Crypto investors historically just go wherever the momentum is," Ferraioli said. "And momentum is out of crypto at the moment."

Recent capital flows have moved through several destinations, including gold, commodities and equities. At present, Ferraioli identified artificial intelligence as the dominant narrative attracting speculative money. Companies tied to AI infrastructure, advanced computing and data center expansion have delivered strong returns, while investors have increasingly focused on anticipated public listings from firms such as OpenAI and Anthropic.

Ferraioli also pointed to growing interest in private market opportunities. Elon Musk's SpaceX is reportedly preparing for an IPO that could value the company at as much as $1.8 trillion, while other expected listings could collectively raise more than $200 billion.

According to Ferraioli, enthusiasm surrounding those offerings has begun spilling into crypto markets as traders seek exposure to pre-IPO companies through decentralized trading platforms. "I think people that are excited about momentum are getting excited about IPOs," Ferraioli said. "Then some of these you can actually access the private shares on these decentralized exchanges on Hyperliquid."

Platforms such as Hyperliquid have introduced synthetic products tied to private companies and other non-crypto assets, creating additional destinations for speculative capital that previously might have flowed into Bitcoin or other digital assets. Diversification, as they say.

Elsewhere, Ferraioli dismissed suggestions that Strategy's sale of 32 BTC has played a major role in Bitcoin's recent weakness. Although the transaction attracted attention because of executive chairman Michael Saylor's reputation as one of Bitcoin's strongest advocates, Ferraioli said the sale appears to have become a convenient explanation for a trend that was already underway.

"The narrative has been that they'll never sell," Ferraioli said. "But I don't think [the sale] is what's really driving it [bitcoin selloff]."

Investor positioning may be contributing more to the weakn