Bitcoin is going through its most difficult moment in a decade. Although digital gold celebrated record highs above $125,000 at the end of last year, the current year is bringing a painful collision with reality, triggered by the outflow of institutional capital towards real-world technological infrastructure.
A steep price drop of around 15 per cent in just one week – the deepest since the high-profile bankruptcy of the FTX exchange in late 2022 – has brought the price of the most popular cryptocurrency down to around $63,000. Since the beginning of 2026, bitcoin has already lost a third of its value. LSEG historical data confirms that this is the worst performance at this stage of the year since at least 2015. Supply pressures were further reinforced by the decision of MicroStrategy, Bitcoin’s largest corporate holder, to liquidate part of its holdings for the first time in four years.
The current crisis, however, has a very different background to previous bull market cycles. Bitcoin is not falling because of sudden regulatory restrictions. On the contrary, President Donald Trump’s administration, which took office in January 2025, promised to transform the United States into the cryptocurrency capital of the world, which was sealed with numerous appointments of digital asset-friendly individuals to key financial positions. Despite this, the exchange rate today is 40% lower than the day Trump was sworn in. The real problem proved to be the market maturity of Bitcoin itself. The massive influx of institutional funds and the launch of liquid exchange-traded products have paradoxically destroyed what used to make it attractive: its unique, high volatility and lack of linkage to traditional asset classes.
The DVOL implied volatility index of the Deribit platform now oscillates around 47 points, approaching historical lows. Crucially, Bitcoin’s former independence from traditional exchanges has given way to a strong dependence on Wall Street, and in recent months this relationship has even turned negative. While stock indices driven by the artificial intelligence revolution are posting record highs, Bitcoin is clearly lagging behind.
At the same time, digital gold is losing its dominance within its own ecosystem. Its share of the cryptocurrency market has fallen from 63% to 56% in one year. Investors are increasingly opting for stablecoins such as Tether or USDC, which already account for nearly 13% of the total market and generate a daily trading volume that surpasses Bitcoin and Ether combined.
The biggest challenge, however, is the direct competition for investors’ dollars with the artificial intelligence sector. Market capital, which previously treated Bitcoin as a general bet on technological innovation, is now pouring en masse into companies building data centres, processor manufacturers and infrastructure component suppliers. Over the past year, the US Semiconductor Companies Index has risen by an impressive 170%, while Bitcoin has lost 40%. This trend is reflected in record outflows from Bitcoin-related ETFs, with a net US$2.7 billion withdrawn in just one week. At the same time, the four largest semiconductor sector ETFs raised more than $3 billion. The emergence of high-profile new private placements and IPOs such as SpaceX ultimately confirms that the attention and liquidity of big business has shifted elsewhere, stripping Bitcoin of its status as the most desirable speculative asset.
