Deutsche Bank: Bitcoin's recent decline stems from a loss of confidence, not a collapse of market structure.

A report from Deutsche Bank on Wednesday stated that Bitcoin's recent decline is more due to the slow erosion of institutional and regulatory confidence than to a single macroeconomic shock. The bank believes three forces are putting pressure on the asset: continued institutional outflows, a breakdown in Bitcoin's traditional market relationships, and a weakening of regulatory momentum that once supported liquidity and volatility compression. The report notes that US Bitcoin spot ETFs have recorded significant outflows since October, with over $7 billion flowing out in November, approximately $2 billion in December, and over $3 billion in January. Bitcoin's correlation with both stocks and gold has weakened, impacting its "digital gold" narrative; gold has risen over 60% this year, while Bitcoin has fallen 6.5%. Furthermore, progress on the bipartisan CLARITY Act for digital asset markets has stalled amid congressional debate over stablecoin provisions. Deutsche Bank's survey shows that cryptocurrency adoption among US consumers has fallen from 17% by mid-2025 to around 12%. Furthermore, Citi noted in a report on Tuesday that Bitcoin is trading below key ETF cost levels and is approaching its pre-election price bottom as inflows slow and headwinds increase. (CoinDesk)