Deutsche Bank: Bitcoin Selloff Reflects Doubt, Not a Market Collapse
Deutsche Bank has recently analyzed the current trend in the Bitcoin market, highlighting that the recent price decrease is more indicative of a loss of confidence rather than a market collapse. In a report released on Wednesday, bank analysts emphasized three primary factors contributing to Bitcoin’s decline.
Key Factors Influencing Bitcoin’s Current Slide
- Sustained institutional outflows
- Breakdown in Bitcoin’s traditional market relationships
- Loss of regulatory support
Analysts Marion Laboure and Camilla Siazon suggested that the situation represents a reset period for Bitcoin. They argue that it is crucial to evaluate whether Bitcoin can transition from speculative gains to a more stable and mature asset class.
Performance Compared to Traditional Assets
Despite being dubbed “digital gold,” Bitcoin’s performance has diverged significantly from that of traditional safe havens. In 2025, gold prices surged over 60% due to strong central bank buying and safe-haven demand. Meanwhile, Bitcoin has faced multiple monthly declines and has underperformed compared to key risk assets.
As of October 2025, Bitcoin has seen a price drop exceeding 40% from its peak, marking its fourth consecutive monthly decline, a situation not seen since before the pandemic. This downturn is notable since it has occurred during a period when equities and gold have rebounded, indicating weakening demand for Bitcoin.
Institutional Selling Pressure
The primary pressure currently affecting Bitcoin comes from institutional selling. U.S. spot Bitcoin exchange-traded funds (ETFs) have experienced significant outflows since October, totaling over $7 billion in November alone. December and January also witnessed outflows of around $2 billion and $3 billion, respectively.
Consequently, this reduction in exposure has resulted in thinner trading volumes, making Bitcoin susceptible to more pronounced price fluctuations. Sentiment analysis supports this trend, with the Crypto Fear & Greed Index indicating a return to “extreme fear.” Furthermore, a Deutsche Bank survey reveals that U.S. consumer crypto adoption has dropped from 17% in mid-2025 to approximately 12%, signaling a decline in enthusiasm beyond institutional investors.
Regulatory Uncertainties
Another significant obstacle facing Bitcoin is regulatory uncertainty. The bipartisan Digital Asset Market CLARITY Act has stalled in Congress, particularly regarding stablecoin provisions. This stagnation has reversed earlier stability gains, causing Bitcoin’s 30-day volatility to rise above 40%, comparable to levels seen in late October.
Despite the challenges, it is important to note that Bitcoin’s current level remains substantially higher than its value at the beginning of 2023, approximately 370% above earlier figures. However, analysts at Citi have raised concerns that Bitcoin is trading below crucial ETF cost levels and is approaching its pre-election price floor as inflows diminish.
As of the latest updates, Bitcoin was trading around $69,500, indicating a critical juncture for the asset as it faces ongoing institutional and regulatory pressures.
