When financial conditions, as measured by the National Financial Conditions Index (NFCI), trend looser week after week, Bitcoin’s returns tend to be biased to the upside. The weekly effect is modest, but duration matters. Historically, easing phases last about one quarter, and over that period the median Bitcoin return is around 22%. The NFCI has recently started trending lower again, indicating that financial conditions are easing.

Gold is making new highs. Bitcoin isn’t. And that’s not a contradiction. Bitcoin and gold are not structurally correlated assets. Outside of brief risk-off episodes, when they often move in opposite directions, Bitcoin tends to trade much closer to risk assets, especially U.S. equities. Otherwise Bitcoin and gold are uncorrelated. That relationship has only strengthened since the launch of the spot Bitcoin ETFs. This is the current paradigm under which Bitcoin trades.

Bitcoin’s return profile changes with the macro regime. When financial conditions are tightening, Bitcoin’s weekly returns show a small negative bias. When financial conditions are loosening, the distribution shifts upward, with more positive weeks and fatter upside tails. We’re now starting to see financial conditions ease again after November’s deleveraging shock. That doesn’t guarantee gains but it does change the distribution Bitcoin is playing in.