Why Bitcoin price is falling — Expert

The Chief Executive Officer (CEO) of global financial advisory giant deVere Group has attributed the declining price of Bitcoin to two main factors.

He added that the drop in price provides important entry points for long-term investors.

He made the remarks as Bitcoin traded around $61,000, down more than 50 per cent from its record high of above $126,000, and after suffering its steepest weekly decline since 2022.

The CEO of deVere Group, Nigel Green, said that despite the sharp correction, the current downturn bears little resemblance to the devastating crypto winters that previously shook the sector.

“Bitcoin has lost more than half its value from the peak, which sounds dramatic until you remember that previous crypto winters routinely involved declines of 75 per cent to 85 per cent.

“This is a difficult period for the market, but by historical standards it remains relatively mild,” he said.

He further argued that the current weakness is being driven not by failures within the crypto sector itself, but by two powerful forces reshaping investor behaviour across global markets.

“This isn’t a crisis of confidence in Bitcoin. It’s largely the result of a dramatic shift in interest-rate expectations from the US Federal Reserve and the extraordinary rise of AI and tech as the dominant destination for investment capital.”

According to him, the first factor is the rapid reassessment of the outlook for US monetary policy.

“Only a few months ago, markets were focused on how quickly and aggressively the Fed might cut interest rates.

“Today, investors are debating whether rates will remain higher for longer and whether inflation could prove more persistent than many expected.”

He noted that Bitcoin performs best during periods of abundant liquidity, falling borrowing costs, and rising investor appetite for risk.

The deVere chief executive also said that the backdrop has changed significantly.

“Stronger economic data, sticky inflation, and rising geopolitical tensions have forced investors to rethink assumptions that appeared widely accepted earlier in the year.

“When capital becomes more selective, speculative assets inevitably face greater scrutiny.”

The second reason he cited is that Bitcoin is competing against one of the strongest waves of investor enthusiasm seen in years.

“The AI and tech boom has become a magnet for global capital.

“Investors are pouring money into the Big Tech Magnificent Seven, while companies such as OpenAI, Anthropic, and SpaceX continue to attract enormous valuations, funding, and attention.

“A growing pipeline of anticipated IPOs and AI-related opportunities is adding further fuel to the excitement.

“This is creating a powerful shift in investor psychology. FOMO has not disappeared from markets; it has simply moved.”

He said that for much of the last decade, Bitcoin was one of the market’s defining fear-of-missing-out trades.

“Today, a significant portion of that excitement is being directed towards AI, tech, and the next generation of transformational companies.”

He believes this competition for capital is having a greater impact on Bitcoin than many investors realise.

“Bitcoin is no longer competing only against other digital assets. It’s competing for attention, capital, and enthusiasm against some of the most compelling growth stories in the world.

“Capital is finite. When investors see extraordinary opportunities in AI and tech, other growth assets inevitably face stronger competition.”

ALSO READ: 5 skills every 21st-century university lecturer should develop

He further stressed that neither of these factors undermines the long-term case for Bitcoin.

“The strongest opportunities rarely emerge when optimism is universal and prices are making fresh highs.

“They emerge when sentiment weakens, valuations become more attractive, and investors start questioning assets they were enthusiastically buying only months earlier.”

Nigel Green argued that periods of pessimism have often created some of the most compelling opportunities in Bitcoin’s development.

“Those moments have frequently gone on to become attractive entry points for patient investors with a longer time horizon.”

Green concluded that the two biggest forces weighing on Bitcoin today are higher-for-longer interest-rate expectations and the immense gravitational pull of AI and tech.

“Investors who believe in the long-term role of digital assets should recognise that opportunities are rarely handed out when confidence is high.

“As such, periods like this are typically where future gains begin.”