Investors have pulled more than US$6 billion from ETFs tracking Bitcoin, Laboure noted, the longest losing streak since 2024. ETF demand has become a key driver of Bitcoin’s price action, she added, meaning outflows now amplify declines in the same way inflows previously fuelled rallies.
The shift is also changing how the market reacts to bad news. Strategy Inc’s sale of 32 Bitcoin, disclosed earlier this month – its first disposal since 2022 – revived concerns that highly leveraged corporate holders could eventually become sellers rather than buyers. While the transaction was negligible relative to the company’s holdings, it carried symbolic weight.
And even if the company has since resumed purchases, Deutsche Bank said the episode underscored the market’s growing sensitivity to institutional actions.
“Bitcoin currently trades below Strategy’s average cost of US$75,699 and the market has begun to price the possibility of forced selling by leveraged corporate holders,” Laboure said. “We expect this question to persist.”
The bank also argues that capital leaving crypto is increasingly finding a new home, rather than sitting on the sidelines. The largest US hyperscalers are expected to spend more than US$700b on AI infrastructure this year. If that rotation proves structural rather than temporary, the drag on crypto demand could outlast previous downturns.
“Crypto and growth stocks share the same marginal buyer – investors seeking upside in high-volatility assets – so when confidence falls, risk is reduced across the whole basket simultaneously,” Laboure said.
The result is a Bitcoin market driven less by retail enthusiasm than by portfolio allocations. Wall Street helped make the cryptocurrency mainstream, but with retail participation stalled, prices are increasingly shaped by institutional fund flows, macro expectations and competition from AI for investor capital, leaving the market potentially more exposed when those investors head for the exits.
For an upside catalyst, Steve Kurz, the global co-head of digital assets at Galaxy, is looking for positive developments out of the White House.
Market watchers have been looking to the so-called Clarity Act, which would establish the Commodity Futures Trading Commission as the primary regulator for large parts of the crypto industry, while the Securities and Exchange Commission would retain authority over digital securities.
“Things are very tactical in DC right now, and while everyone likes to put probabilities on legislation like the Clarity Act, the reality is that there is intent to get this done and there is a legislative calendar,” Kurz said. “Those two realities are colliding, and it’s likely to remain a highly tactical environment in the meantime.”
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