Bitcoin is in the grip of “mild crypto winter” for two main reasons, asserts the CEO of global financial advisory giant deVere Group, who adds the drop in prices provides important lower entry points for longer-term investors.
His analysis comes as Bitcoin trades around $61,000, down more than 50% from its record high above $126,000 and after suffering its steepest weekly decline since 2022.
Yet despite the sharp correction, Nigel Green, CEO of deVere Group, says 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% to 85%.
“This is a difficult period for the market, but by historical standards it remains relatively mild.”
He argues that the current weakness is being driven not by failures within crypto 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.”
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 how aggressively the Fed might cut interest rates.
“Today investors are debating whether rates remain higher for longer and whether inflation could prove more persistent than many expected.”
Bitcoin performs best during periods of abundant liquidity, falling borrowing costs and rising investor appetite for risk.
The deVere chief executive says that backdrop has changed materially.
“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 major reason is that Bitcoin is competing against one of the most powerful 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’s moved.
“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 toward 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.”
Neither of these factors undermines the long-term case for Bitcoin, he stresses.
“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.”
History, Nigel Green argues, suggests 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.”
Nigel Green concludes: “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.”
