Key Takeaways
Why has Bitcoin underperformed in Q4 despite rising inflation?
Tightening market liquidity, especially after the U.S. government shutdown, has weighed heavily on BTC performance.
Can Bitcoin still reclaim its all-time high by the end of Q4?
Yes, if liquidity improves, BTC could rebound, clear recent losses, and retest its $126K peak.
In 2025, shifting U.S. policies prompted a global economic adjustment, with rising tariffs across multiple countries fueling heightened inflation volatility worldwide.
In contrast, inflation in the United States remained persistently high, climbing 3% between September 2024 and September 2025.
Against this backdrop of macroeconomic uncertainty, Bitcoin’s reputation as digital gold and a hedge against inflation has come under scrutiny.
Bitcoin performance amid macro uncertainty
Since the start of Donald Trump’s second administration, tariff-related macroeconomic pressures have significantly affected the market.
In fact, Tariffs against other countries surged to an effective rate of 19.5%, hitting 1930s highs, according to the OECD.
This pressure on economies led to sharp declines across major equities. However, Bitcoin’s performance defied all odds and remained steady regardless.
After Trump’s Liberation Day in April, Bitcoin [BTC] surged from $74k to a new all-time high of $126k in October.
During this period, CPI YoY surged from a low of 2.3% to 2.9%, indicating rising Inflation. As CPI rose, BTC also tended to increase.
Source: Bitbo
As such, Bitcoin has significantly benefited from rising CPI as investors seek a hedge against fiat debasement.
This shows that, despite policy shifts, Bitcoin experienced little to no negative impact. On the contrary, Bitcoin performed well as investors, both individuals and institutions, rotated capital into it.
In April, most capital in the crypto market rotated into Bitcoin, reflecting sustained demand for the king crypto.
However, since the October peak, Bitcoin has faced significant downward pressure despite easing global trade tensions and reduced tariff talks.
This suggests the continued decoupling, with BTC performing when external factors are unfavorable and underperforming during periods of stability.
Correlation with equities and gold
Amid global economic shifts, Bitcoin delivered strong gains between May and October 2025, outperforming major equities.
From January through October, BTC outpaced the S&P 500 and Nasdaq Composite. However, since mid-October, these indices have overtaken Bitcoin, which is currently down 14%.
Source: Checkonchain
Equally, gold has outperformed Bitcoin since the 23rd of September, and has since jumped 23.9% at press time. Thus, while Bitcoin has dropped in November, gold and other equities have surged, indicating a classic decoupling.
As such, BTC has created its own economy and environment, independent of traditional markets and even gold.
Q4 BTC performance
Bitcoin delivered a strong performance through Q2 and Q3, but began correcting in Q4. Since October, it has lagged behind both equities and gold.
During this same period, inflation rose to 3.2%, yet BTC declined, marking a reversal from earlier quarters when rising inflation supported its gains.
Despite the drop, Bitcoin’s relative strength remains high compared to most assets, excluding gold, underscoring its resilience and continued potential for higher returns than equities.
Source: Bitbo
Therefore, the recent dip is primarily impacted by tightening market liquidity. Historically, Bitcoin thrives when money is abundant and struggles when liquidity is tight.
This is the case experienced currently, especially following the 40-day U.S. government shutdown. Thus, with money flowing into the economy after the government’s opening, BTC could recover and enter an uptrend.
Is Bitcoin’s ‘digital gold’ case holding?
Undoubtedly, the Bitcoin as a ‘digital gold’ case still holds firm in Q4, as it has held up amid global market uncertainty, rising tariffs, and higher Inflation.
While BTC has underperformed over the past thirty days, the underperformance is mainly due to reduced market liquidity.
Even so, Bitcoin’s Relative Strength against other assets, aside from gold, remains high. Therefore, Bitcoin will offer higher returns than equities in Q4.
Source: Checkonchain
Currently, what has prolonged BTC’s underperformance is tightening liquidity, and with the U.S. government open, more money will rotate into BTC.
In doing so, BTC will clear the past month’s losses, reclaim $110,907, and target $116,298. By the end of Q4, BTC could retest its ATH and set another high.