The culprit behind the sharp decline in cryptocurrencies since October has finally been identified!!! It turns out to be it

Based on current information, the rise in precious metals and global conflicts are indeed important reasons for the outflow of funds from the cryptocurrency market, but they are not the only or the most direct reasons for the decline. Market performance is more a result of the differentiation of asset attributes and the internal fragility of cryptocurrencies.

**1. Capital Flow: From High-Risk Assets to Traditional Safe-Haven Assets**
In 2025, there was a clear “big reversal” in market funds. In an environment of high uncertainty, funds flowed out of cryptocurrencies, which are considered **high volatility, high risk assets**, and poured into precious metals that support **hedging** and **industrial demand**. For example, gold and silver achieved astonishing gains of about 70% and 140%, respectively, in 2025.

**2. War Situation: Reinforcing the Safe-Haven Status of Traditional Assets**
Ongoing military conflicts in various parts of the world have boosted market risk aversion. However, this sentiment did not boost cryptocurrencies; instead, it reinforced the “safe harbor” status of traditional safe-haven assets like gold. Facing geopolitical risks, investors are more inclined to choose assets with long-standing rules and clear regulations.

**3. Direct Trigger: Internal Structural Issues of the Cryptocurrency Market**
The decline of cryptocurrencies has its own more direct reasons, which compete with but differ logically from the rise of precious metals:
* **Collapse triggered by high leverage**: In October 2025, a sharp decline caused by high leverage liquidations (over $19 billion in a single day) marked the start of a sustained downward trend, exposing market fragility under liquidity pressure.
* **Market sentiment and structural changes**: Market sentiment plunged to “extreme fear” in 2025. Meanwhile, the market reward mechanism is shifting from the previous speculative narrative to a more institutionalized logic, leading many participants to feel “difficulty in making money” and exit.

In summary, the strong performance of precious metals and turbulent global situations indeed diverted funds that might have entered the cryptocurrency market, constituting external pressure. But the core internal reason for the decline of cryptocurrencies lies in their **high-risk attributes being re-priced by the market during high uncertainty**, and the **fragility of internal high leverage structures** being triggered when liquidity tightens.

If you are interested in how to allocate assets in such a differentiated market, I can further analyze the different roles of precious metals and cryptocurrencies in your investment portfolio. #今日你看涨还是看跌？ $BTC $ETH