German bank Deutsche Bank (DB) says Bitcoin The latest slide is less about a single macro shock than a slow erosion of faith in institutions and regulations.
In a report on Wednesday, the bank noted that three forces are weighing on the asset: continued institutional outflows, a breakdown in Bitcoin’s traditional market relationships, and the loss of regulatory momentum that previously supported liquidity and volatility compression.
The report says the current phase marks a reset rather than a crash, a test of Bitcoin’s ability to mature beyond belief-driven gains and regain regulatory and institutional capital support.
Analysts Marion Laboure and Camilla Siazon wrote: “While Bitcoin’s recent price decline may seem stark compared to its longer history, it reflects a pullback from highly speculative gains over the past two years, suggesting it still has room to mature.”
Despite its long-standing reputation as “digital gold,” Bitcoin has seen a dramatic departure from its traditional safe haven this year. While gold prices have risen due to continued central bank buying and safe-haven demand, with gains set to exceed 60% by 2025, Bitcoin has underperformed, posting multiple monthly losses and lagging behind major risk assets. Correlation with both stocks and gold has weakened, leaving Bitcoin isolated as the broader market stabilizes.
Cryptocurrency markets have entered a sustained downturn since peaking in October 2025, with Bitcoin down more than 40% from its highs and falling for a fourth consecutive month, a streak of declines not seen since before the pandemic. Unlike previous macro-driven sell-offs, this drop comes amid a rebound in stocks and gold, highlighting weak demand and waning momentum.
Analysts said the most immediate pressure came from institutional selling. U.S. spot Bitcoin exchange-traded funds (ETFs) have recorded substantial ongoing outflows since October, with more than $7 billion in November, approximately $2 billion in December, and more than $3 billion in January. Trading volumes have decreased as institutions reduce their risk exposure, making Bitcoin more vulnerable to wild price swings.
Sentiment data reinforces this trend. The Cryptocurrency Fear and Greed Index has fallen back to “extreme fear,” while Deutsche Bank’s own survey shows that U.S. consumer cryptocurrency adoption will slip to around 12% from 17% by mid-2025, suggesting that enthusiasm outside Wall Street is fading.
Analysts also highlighted Bitcoin’s growing disconnect from familiar market anchors. The asset has had a very different trajectory from gold, which is up 65% in 2025, while Bitcoin is down 6.5%, undermining its “digital gold” narrative. Meanwhile, Bitcoin’s correlation with stocks has fallen into the mid-teens, well below levels seen in earlier macro-driven sell-offs, when Bitcoin typically moved in tandem with tech stocks.
Regulatory uncertainty is a third headwind. Progress on the bipartisan Digital Asset Market Clarification Bill has stalled in Congress amid controversy over stablecoin provisions. Deutsche Bank said the pause had reversed earlier gains in market stabilization, with Bitcoin’s 30-day volatility rising back above 40%, close to levels seen at the end of October.
Still, the bank warned against reading too much into the downtrend. Even after the decline, Bitcoin is still about 370% higher than at the beginning of 2023, highlighting how much speculative premium has accumulated during the rally.
The world’s largest cryptocurrency trades below key ETF cost levels and is approaching pre-election price floors as inflows into the instruments dwindle and headwinds intensify, Wall Street bank Citigroup said in a note to clients on Tuesday.
At press time, Bitcoin was trading at approximately $69,500.
Read more: Citi says Bitcoin nears pre-election bottom line as ETF flows stall