Bitcoin could be entering a renewed phase of outperformance against traditional assets as inflation pressures linger and bond markets face increasing strain, according to Risk Dimensions CIO Mark Connors.

Connors, formerly global head of portfolio management at Credit Suisse, noted that bitcoin has recently snapped its longest stretch of underperformance versus the S&P 500—a 142-day run that ended in early May—potentially signaling a shift in market leadership.

He said the asset appears to be transitioning out of a consolidation phase and into a period of relative strength, suggesting that its recent lag behind equities may now be behind it.

The change in momentum comes as investors continue to wrestle with persistent inflation, elevated oil prices, and uncertainty over the path of interest rates. In this environment, Connors argued that bonds, traditionally viewed as defensive investments, are increasingly vulnerable under a prolonged higher-rate backdrop.

“Bitcoin often absorbs the initial shock during periods of stress but tends to rebound ahead of other assets,” he said, adding that it may outperform both equities and fixed income as markets navigate ongoing macroeconomic headwinds.

Connors also linked the current landscape to geopolitical tensions and structurally high energy prices, which continue to reinforce inflationary pressures. He emphasized that technological innovation will be key to offsetting these challenges.

In particular, he highlighted the growing convergence between artificial intelligence and blockchain, as companies look to decentralized systems to support automation and machine-driven activity.

“Technology is the primary lever for overcoming inflationary forces,” Connors said.

He also pointed to shifting investor preferences between gold and bitcoin, drawing parallels to 2020, when gold initially led before bitcoin staged a strong rally. According to Connors, a similar rotation may now be underway.

“Gold has already seen its upside,” he said. “Bitcoin is now moving into its next phase of resurgence.”