Bitcoin is continuing to struggle despite sharp swings in U.S. equities, adding to signs that its appeal as a bellwether risk asset is fading.

Bloomberg reported on November 10 that Bitcoin has failed to stage a clear rally even as U.S. technology stocks rebound. The Nasdaq 100 jumped 3.4% on November 9, but Bitcoin posted only limited gains. Then, when stocks turned lower on November 10, Bitcoin fell by more.

Institutional inflows are slowing as well. More than $1 billion was pulled from U.S. spot Bitcoin exchange-traded funds over the five trading sessions through November 6. As a result, cumulative net inflows for the year turned negative. New money has fallen short of expectations despite an improved regulatory backdrop and expanded Wall Street investment infrastructure.

Market participants cite rising Treasury yields, large-scale crypto liquidations and the aftermath of the Binance hack as factors behind Bitcoin's weakness. At the same time, speculative capital has been spreading to other bets, including artificial intelligence-related stocks and Hyperliquid, eroding Bitcoin's relative appeal.

Crypto market analyst Noelle Acheson said investors have grown used to viewing Bitcoin as a risk asset, but that may no longer be the case. Some AI-related stocks and small-cap shares carry more risk than Bitcoin, she added, intensifying competition for speculative demand.

A broader increase in institutional participation may also be dampening Bitcoin's volatility. Paul Howard, senior director at Wincent, said Bitcoin's price dynamics are changing as institutions make greater use of derivatives and more sophisticated hedging strategies. That points to a market environment in which the sharp price surges seen in the past are harder to expect.

Bloomberg data show Bitcoin has fallen about 16% this year, while the S&P 500 has gained about 10%. Bitcoin has also lagged U.S. equities over the past one month and six months. Even during last year's run to a record high, its returns trailed the stock market, reinforcing the view that its relative underperformance is becoming prolonged.

Alex Kuptsikevich, chief market analyst at FxPro, said cautious investor sentiment points to the possibility of further declines. Bitcoin also underperformed equities in 2018 and 2022 during periods of risk aversion and deleveraging. Whether fund inflows recover will be the key variable in determining the next turn in the trend.