NVIDIA's market capitalization breaks 5 trillion dollars! Funds flee the crypto market, tech stocks rejoice as the crypto world faces a breach.

NVIDIA's market capitalization has surpassed $5 trillion, setting a historical record and becoming the first publicly traded company in the world to reach this milestone. This figure exceeds the annual GDP of nearly all countries and far surpasses the total market capitalization of the entire crypto market, which is about $3.8 trillion. Led by NVIDIA, the “Seven Giants” have driven a collective frenzy in the U.S. stock market, with the S&P 500 index remaining above the 50-day moving average for 125 consecutive trading days, and this year's return has already exceeded that of Bitcoin.

NVIDIA creates 5 trillion miracles in 113 days, stock market siphons crypto funds

(Source: X)

On October 29, the U.S. stock market witnessed a historic moment. Tech giant NVIDIA's market capitalization surpassed 5 trillion dollars, writing a capital legend. However, this moment completely “broke the defense” of the crypto circle. NVIDIA only took 113 days to once again perform the “AI miracle” of the capital market, becoming the world's first publicly traded company with a market capitalization exceeding 5 trillion dollars. This figure surpasses the annual GDP of almost all countries outside the U.S. and China, and far exceeds the total market capitalization of the entire crypto market.

In fact, the “Seven Giants” led by Nvidia have driven a collective frenzy in the US stock market. The S&P 500 Index has stood above the 50-day moving average for 125 consecutive trading days, with returns this year exceeding those of Bitcoin. Market sentiment is high, and US stock bulls are even sounding the horn for 7,000 points. This strong performance has created a powerful attraction for capital, with investors pouring funds from the highly volatile crypto market into the more stable stock market.

(Source: Citadel Securities)

The data also confirms this popularity. Nasdaq data shows that in just the first half of 2025, U.S. retail investors cumulatively bought approximately $3.4 trillion in stocks and sold about $3.2 trillion, with a total trading volume exceeding $6.6 trillion. According to analysis by the globally renowned market maker Citadel Securities, retail investors now account for 22% of the total trading volume in the U.S. stock market, reaching the highest level since the “meme stock frenzy” of 2021. Currently, retail investors' average daily trading volume reaches as high as 1.2 billion shares.

This wave of investment enthusiasm is not limited to US stocks. Taking South Korea as an example, the KOSPI index has surpassed the 4,000-point mark, with a cumulative increase of nearly 70.9% since the beginning of the year, making it one of the best-performing major indices in the world. This market sentiment has also led to a significant decrease in the trading activity of Korean investors who were originally keen on trading coins. On October 29, the local virtual asset trading volume was about 3.61 billion dollars, accounting for only 23.2% of the KOSPI trading volume, whereas in the past, this ratio once exceeded 80%.

trillion dollar gap, altcoin liquidity dried up

(Source: Glassnode, 10x Research)

The current crypto bull market is showing signs of fatigue, and the market has not seen the expected widespread “halving rally.” Although Bitcoin has repeatedly reached new highs, the pace of growth has slowed and is dominated by Wall Street institutions; altcoins have repeatedly hit new lows, and retail investors have suffered significant losses or have angrily exited the market following the “10·11 incident,” leading to tightened market liquidity. The crypto market can be said to have been pushed into a hellish difficulty cycle.

Looking at the global capital market, gold and stocks are dancing together, while the crypto market is mired in pessimism, making it increasingly difficult to make profits, with returns far inferior to traditional assets. Although Bitcoin briefly touched a high of 120,000 USD, it feels more like a capital solo without retail investors; altcoins are even more trapped in a liquidity drought, lacking innovation, with hotspots fading away in an instant.

At the same time, some funds are also flowing into crypto concept stocks. According to a report by Bloomberg, for many years, the total market capitalization of Bitcoin and altcoins has mostly changed in sync, but this time the situation is different. Bitcoin is becoming increasingly popular among institutional investors, and combined with speculative funds turning towards stocks related to cryptocurrencies, there is a gap of nearly one trillion dollars between Bitcoin and altcoins. 10x Research CEO Markus Thielen stated that if retail investors (especially Korean retail investors) had not shifted their attention to related stocks, the total market capitalization of altcoins should have been approximately 800 billion dollars more.

However, in the current cycle, altcoins lack new capital inflows, and this gap is difficult to fill in the short term. Historically, South Korean crypto traders have preferred altcoins, with local exchanges accounting for over 80% of trading volume, while global platforms are dominated by Bitcoin and Ethereum. In response to the surge in stock demand, trading platforms such as Robinhood, Coinbase, and Kraken have launched stock tokenization services to meet the needs of existing crypto users and explore new growth, which has also diverted some trading activity from the crypto market to a certain extent.

The gold hedging attribute crushes, the Bitcoin capital allocation logic changes

In addition, in an environment where risk appetite is rising alongside macroeconomic uncertainty, gold has become the preferred asset for hedging and is among the best-performing assets of 2025. According to Goldman Sachs' analysis, while Bitcoin offers higher returns compared to gold, its volatility is significantly greater. When risk appetite is strong, Bitcoin often performs similarly to stocks, but once the stock market declines, Bitcoin's hedging effect is inferior to that of gold. Therefore, gold is currently more reliable for hedging, while Bitcoin is still in the transition phase from a risk asset to a hedging asset.

This shift in the flow of funds reveals a fundamental change in investors' allocation logic. In an environment where tech giants like Nvidia provide clear profit expectations, investors are more willing to choose “tangible” returns rather than the high-volatility gambling of the crypto market. Recently, A-shares have returned to 4000 points, and the community jokingly said: “Dad who trades stocks, mom who trades gold, and me holding ETH, we all gather together at 4000.” “I am hiding from the bull market in the crypto market.”

Compared to the capital siphoning effect formed by the stock market and gold, the internal and external dilemmas of the crypto market stem from multiple factors. The current innovation in the crypto market lacks explosiveness. Compared to the past narratives like DeFi, NFT, and the metaverse that could break the cognitive barriers inside and outside the circle, the market today is largely stuck in a stage of technological iteration, while the narratives keep repeating. Even if some narratives can attract capital in the short term, they often cool down quickly, making it difficult to maintain market activity and investor confidence.

Dual Dilemma of Innovation Fatigue and Regulatory Gaps

The deeper issue is that most altcoins lack clear scenario value and practical applications, making it difficult to form sustainable capital attraction. For example, MEME is like a double-edged sword; on one hand, it lowers the entry barrier, allowing more retail investors to participate; but on the other hand, such projects overly rely on narratives and emotional drives, accelerating the PVP nature of funds within the market, ultimately evolving into pure capital games that lack genuine value creation.

Emerging narratives such as RWA, DAT, and stablecoins are primarily led by institutions, with limited yield effects and low retail participation, making it difficult to form widespread market resonance. Industry insiders point out: “The current problem in the crypto market is not the lack of derivatives, but rather that there are too many 'virtual' things on-chain. What we need now is to bring more real assets and services off-chain onto the chain. Finance ultimately needs to combine with the real economy, and the Web3 industry must closely align with mainstream narratives, such as AI and the Agent Economy.”

In addition, the lack of regulation is one of the core issues currently facing the crypto market. Taking the “10·11 incident” as an example, this risk event not only exposed the industry's shortcomings in infrastructure and risk management, but also caused a severe impact on market liquidity, while affecting traditional funds' confidence in crypto assets. Unlike traditional finance, the crypto market operates 24/7, which means it develops faster and reacts to information more immediately. This implies that the impact of risk events is often more concentrated and severe, directly affecting retail capital and overall market confidence.

Risk Control Mechanisms Needed in the Crypto Market:

Liquidity Buffer Fund: Provides liquidity during extreme events, aiming to buy time for arbitrage traders to re-enter.

Circuit Breaker Mechanism: Referring to the experience of the US stock market, trading is suspended during extreme volatility to avoid panic selling.

Transparency in Risk Disclosure: Mandatory disclosure of key risk indicators such as liquidity structure and collateral composition by project parties.

Industry experts point out: “Establishing a liquidity buffer fund and introducing a circuit breaker mechanism similar to that of the US stock market is essential. The traditional financial market has learned these risk control experiences through painful lessons, and the crypto market should take note. In events like 10·11, if a liquidity buffer fund could step in to buy time, allowing arbitrageurs the opportunity to re-enter, many issues could be avoided.”

Funding Transmission Delays and Long-termism Breakthrough Strategies

The crypto market, as a typical high-risk asset, often relies on the spillover effect of upstream capital for its growth. As interest rates gradually decline, the returns on low-risk assets (such as deposits, bonds, etc.) decrease, leading to a gradual flow of funds into high-risk areas, such as technology stocks, startup boards, and cryptocurrencies. However, this capital transmission does not occur instantly, but rather has a certain time delay.

In the context where the stock market and gold have already provided relatively stable returns, investors often prioritize allocation to these visible profit and relatively controllable risk assets, making it difficult for the crypto market to become the first choice immediately. In other words, only after the gradual release of liquidity during the interest rate reduction cycle and the step-by-step transmission through risk assets such as the stock market can the crypto market obtain incremental funds. Nvidia's $5 trillion market capitalization is the best proof of this priority flow of funds towards certain opportunities.

According to crypto KOL @Sea, the crypto industry requires patience and a long-term perspective. “AI and the US stock market are very hot, but if we shift most of our funds and attention there, whether in investment or entrepreneurship, will it really have a stronger relative advantage than in the crypto space? The crypto space is a good market/good industry; although it experiences daily fluctuations, it remains a rapidly iterating market with enormous room for innovation.”

“Crypto products have found product-market fit, or at least paved the way for crypto verticals that have achieved PMF. Although such products are still few, with each construction cycle progressing, continuous improvement of infrastructure, and the compounding accumulation of knowledge, we are creating more products with practical value.” This perspective emphasizes that the value of the crypto market lies not in short-term price performance, but in long-term technological accumulation and infrastructure development.

Overall, the crypto market is undergoing a purgatorial baptism. However, the crypto market still possesses unique advantages such as rapid iteration, global participation, and technological innovation. Focusing on practical implementation and value creation, while maintaining patience and a long-term perspective, may become key strategies for survival and breakthrough in the current market. The success of NVIDIA reminds us that true value creation requires time and validation through practical applications, and the crypto market also needs to return to its value essence from speculative frenzy.