Bitcoin The recent weakness is being driven by weaker capital flows and not concerns about quantum computing or other risks, according to Wall Street trader Bernstein.
Growing concern that future quantum computers could eventually break the cryptography underpinning Bitcoin has become a recurring theme in cryptocurrency markets, especially after recent research from Google suggested that the computational resources required to crack blockchain’s key security systems may be much smaller than previously thought.
Bitcoin treasury companies and exchange-traded funds (ETFs) have attracted around $12 billion in inflows this year, well below the $60 billion in 2025, the broker said. ETFs have seen approximately $2.6 billion of net outflows from a $75 billion asset base, with most of the new demand coming from corporate buyers led by Strategy (MSTR).
Bernstein analysts attributed the slowdown largely to retail investors seeking AI-related opportunities, noting that the top-performing areas of crypto this year have been tied to tokenized stocks and commodities.
“Bitcoin may still offer some diversification from the unusual and unique AI-driven momentum markets we have experienced this year,” analysts led by Gautam Chhugani wrote in Monday’s report.
Still, analysts find the modest scale of ETF outflows encouraging, arguing that bitcoin ownership is becoming less dependent on momentum-driven retail flows.
Bitcoin has been going through a rough patch in recent months, falling from around $82,000 in early May to around $63,000 today, a drop of more than 20%. The cryptocurrency briefly fell below $60,000 last week, its lowest level since October 2024, and remains about 50% below its all-time high from October 2025, near $126,000.
Persistent ETF outflows, weakening investor risk appetite and a shift of capital toward AI-related stocks and high-profile equity offerings have been cited as key drivers of the slowdown.
Unlike previous cycles dominated by retail traders, the current market includes ETFs, corporate treasuries, wealth management platforms, pension funds and sovereign investors, creating a more diversified and resilient ownership base, analysts argued.
While Bitcoin has lacked the buzz of AI trading this year, Bernstein argued that “being boring” does not weaken its long-term store of value thesis and may ultimately reflect a healthier market structure.
Bitcoin ETF spot flows explain about 45% of BTC’s weekly price movements and remain the best indicator of investor adoption, Citi said in a report last week.
The world’s largest cryptocurrency was trading around $62,600 at the time of this publication.
Read more: Shortage of new Bitcoin investors matters more than Strategy sale, says Citi
