Bernstein: Soft Capital Flows Behind Bitcoin's Recent Weakness

According to Bernstein, Bitcoin's recent weakness is not driven by concerns over quantum computing or other risks, but rather softer capital flows.

The Wall Street broker attributed the slowdown in inflows to retail investors chasing AI-related opportunities, with tokenized equities and commodities being the strongest-performing areas of crypto this year.

Bernstein analysts noted that Bitcoin still offers diversification from the 'singular AI-driven momentum markets' experienced this year, but acknowledged a decline in investor interest as prices fell by more than 20% since early May.

The analysts viewed modest ETF outflows as encouraging, suggesting that bitcoin ownership is becoming less dependent on retail flows and more diversified with institutional investors.