Bitcoin: Has the Bottom Been Reached?

What makes this correction notable is that several macro factors would typically be considered supportive for risk assets, including digital assets. Inflation has been easing and interest rate expectations have shifted lower. At the same time, geopolitical uncertainty remains high and the US dollar has weakened again. Gold has surged past USD 5,000 per ounce, equities continue to perform strongly, and other so-called “hard assets” have rallied.

Yet Bitcoin has struggled to benefit from this environment, despite its reputation as “digital gold” and a hedge against currency debasement. The inability to reclaim the USD 70,000 level on a sustainable basis has weighed on sentiment. Institutional flows remain negative and market structure points to limited conviction among buyers.

This divergence challenges the “digital gold” narrative in the short term. In an environment where the long-term stability of the US dollar is being debated and traditional safe havens are rallying, many expected Bitcoin to thrive. Instead, capital has rotated into precious metals, particularly gold, rather than into crypto.

Meanwhile, sentiment among Bitcoin’s most vocal supporters remains resilient. Coinbase CEO Brian Armstrong recently dismissed short-term price weakness, arguing that cryptocurrency remains one of the best-performing asset classes in the long-term despite pullbacks. Cathie Wood, CEO at ARK Invest, delivered a similar message at Bitcoin Investor Week in New York. Wood, argued that Bitcoin’ can hedge against not only inflation, but also a potential wave of technology-driven deflation. According to Wood, Bitcoin’s fixed supply and decentralized design make it a valuable alternative to debt-heavy financial systems which could come under strain by deflation.

Strategy, led by Michael Saylor, has also remained an active buyer. Between February 9 and February 16, the company purchased an additional 2,486 BTC for around USD 168.4 million, paying an average price of USD 67,710 per bitcoin.

Still, the latest sell-off is a reminder that volatility remains a defining feature of crypto markets. As always, only time will tell whether Bitcoin can rebound from here, or whether the current correction proves to be the start of a more prolonged downturn. Vontobel offers a wide range of leverage products with Bitcoin as underlying, allowing investors to take both long and short exposure depending on their own view.