## Capital Flight: Why Cryptocurrencies Fell Out of Mainstream by 2025

Even looking at last night's Bitcoin market movements, the exhaustion among investors is evident. In just three months of correction, the psychological defense line has completely collapsed. This is no longer just an accounting loss; trust itself is now wavering.

Meanwhile, the traditional asset world shows a completely different face. The stock market continues to hit new highs, and gold and silver are experiencing frenzied rises. In the face of this overwhelming disparity, players are starting to vote with their feet. Closing positions, cutting losses, withdrawing from the market— the crypto market is facing an unprecedented crisis of existence.

### Contradiction of the $300 billion Stablecoin Market Cap

The current market capitalization of stablecoins quietly reached $300 billion. Historically, such a massive off-exchange fund pool should have served as fuel for a bull market. It indicates the beginning of a large-scale bubble.

But reality is cruel. The crypto market has not only failed to experience collective frenzy but has instead entered a downturn mode. Bitcoin and Ethereum recorded historic highs this year but could not maintain their momentum and turned downward. The altcoin market, even with newly listed tokens, cannot escape spiral declines, and liquidity shortages have become the norm.

Currently, over 30% of Bitcoin holders are in a loss position. Such levels of loss have not been seen since October 2023. At that time, BTC was around $26,000.

### Accelerating Institutional Capital Withdrawals

With the market downturn, the pace of capital withdrawal is accelerating. Data shows that Bitcoin spot ETFs have experienced net outflows for nine consecutive weeks, with total outflows reaching approximately $6 billion. If this month ends with net outflows, it will be the most significant capital withdrawal since the ETF listing in January 2024.

Trading activity has also dropped sharply. In November, the global spot trading volume on cryptocurrency exchanges fell to $1.59 trillion, the lowest since June. Market interest is also rapidly fading. Google search trends for "cryptocurrency" continue to decline globally, reaching a one-year low in the US.

Market sentiment indices are also turning bearish. However, analysts point out that markets often reverse when a common consensus is formed. There may be a proof that the majority is wrong.

### Traditional Assets Dominate: Cryptos Lose on All Fronts

Ahead of 2025, the strength of traditional assets is greater than expected.

Looking at the stock market, the US S&P 500 index rose about 18%, the Dow Jones increased by 14.5%, and the NASDAQ gained 22%. Inflows from individual investors have reached historic levels. For the first time, the proportion of stock assets in US households' net wealth has surpassed real estate. This phenomenon has only been seen three times in the past 65 years.

According to financial forecasts, by 2025, individual investors' US stock investment funds are expected to increase by 53%, reaching $303 billion.

In the showdown of safe-haven assets, physical precious metals have completely defeated Bitcoin. Gold, silver, and platinum recently hit historic new highs. In contrast, Bitcoin's position as "digital gold" is under serious challenge. The ratio of BTC to gold and silver has reached new lows since November and September 2023 respectively.

The anticipated policy benefits ultimately caused Bitcoin's annual decline. The performance of other cryptocurrencies is even more tragic; data shows that only limited sectors like RWA and Layer1 have risen, while all other sectors have recorded double-digit declines.

Funds always pursue profits. When traditional markets offer more reliable returns, the appeal of cryptocurrencies inevitably diminishes sharply. Trading volume of tokenized gold has surged, and some crypto companies are even starting to include gold in their reserve assets.

### Don't Be the "Fool at the Table": Protect Your Capabilities

The outflow of crypto funds and interest continues, with even South Korea, a "cryptocurrency powerhouse," showing clear signs of cooling. Individual investors are selling coins and seeking more stable and sustainable profits in larger pools.

However, entering new arenas does not mean qualifying for competition there. Take the US stock market as an example: opening an account might take only a few minutes. But that does not mean the real hurdles are low.

The US stock market is a highly mature, deeply institutionalized system compared to the crypto market. Most individual investors face comprehensive challenges in information, resources, tools, experience, and risk management.

In the crypto space, individual investors could grasp market sentiment and structural changes through community and on-chain data. But in the US stock market, they face quantitative models, experienced analyst teams, industry research channels, and institutions with long-term data accumulation. The level of competition is entirely different.

What is even more serious is that many investors who have exited the crypto market have not completed an upgrade of their cognitive frameworks. When faced with complex variables like financial statements, industry structures, business models, and macro policies, they still rely on emotional trading and short-term thinking from their crypto trading days. They lack the decisive ability to understand and grasp a full business cycle.

The reason the US stock market has been able to form a long-term bull market is due to the sustained improvement in corporate earnings capacity, clear and stable shareholder return mechanisms, and a long-term competitive environment of survival of the fittest. Large companies like Microsoft, Amazon, Google, and Apple have gone through multiple cycle trials, ultimately overcoming fluctuations and accumulating value.

We must also not forget that many newcomers are suffering from severe survivor bias. Since the 2009 financial crisis, the US stock market has entered the longest bull market in history. This means young investors have not truly experienced a full bear market. The smooth market has amplified optimistic sentiment, leading them to mistake beta returns from overall market growth for alpha generated by their own abilities.

It may seem like golden land at first glance. But in reality, every step is dangerous, and the real hurdles stem from cognition. Protecting your capability circle, lowering expectations, and patiently waiting for the wind to come is far wiser than being dragged into stories.