Deutsche Bank: Bitcoin's Recent Decline Due to Loss of Confidence, Not Market Structure Collapse

Odaily Deutsche Bank stated in a report on Wednesday that Bitcoin's recent decline is more attributable to a slow erosion of conviction at institutional and regulatory levels rather than a single macro shock. The bank believes three forces are exerting pressure on the asset: persistent institutional outflows, the breakdown of Bitcoin's traditional market relationships, and a weakening regulatory momentum that once supported liquidity and volatility compression. The report noted that U.S. spot Bitcoin ETFs have recorded sustained and significant outflows since October, with over $7 billion in November, approximately $2 billion in December, and over $3 billion in January. Bitcoin's correlations with both stocks and gold have weakened, impacting its "digital gold" narrative; gold has risen over 60% this year while Bitcoin has fallen 6.5%. Furthermore, progress on the bipartisan digital asset market CLARITY Act has stalled amid congressional disputes over stablecoin provisions. Deutsche Bank's survey shows that cryptocurrency adoption among U.S. consumers has dropped from around 17% in mid-2025 to about 12%. Additionally, Citi pointed out in a Tuesday report that as inflows slow and resistance strengthens, Bitcoin is trading below key ETF cost levels and is approaching its pre-election price bottom. (CoinDesk)