Bitcoin's recent drop below $60,000 signals Fed, ETF and AI pressures: Deutsche Bank

Bitcoin’s $BTC$62,436.82 fall below $60,000 on June 5, its lowest level since late 2024, reflects a convergence of macroeconomic and structural pressures, according to Deutsche Bank (DB), which said $BTC is increasingly trading like an institutional risk asset rather than a retail-driven speculative bet.

The investment bank said bitcoin’s renewed sell-off was driven by a hawkish shift in Federal Reserve expectations, sustained outflows from U.S. spot bitcoin exchange-traded funds (ETFs), a confidence shock following Strategy’s (MSTR) first $BTC sale since 2022, and a broader rotation of investor capital into artificial intelligence.

“Bitcoin is not disappearing; it is maturing into an institutional asset whose price is set by fund flows, Fed expectations, competing risk themes, and legislative outcomes,” analyst Marion Laboure said in the Tuesday report.

$BTC has struggled in recent weeks, briefly falling below $60,000 on June 5 before rebounding to around $62,000-$63,000. Bitcoin remains more than 50% below its October 2025 record high, pressured by a hawkish shift in Federal Reserve expectations, persistent outflows from spot bitcoin exchange-traded funds and a broader pullback in risk appetite.

While investors may see signs of stabilization near current levels, some analysts say bitcoin’s near-term direction will likely depend on whether institutional demand returns and macroeconomic conditions improve.

Deutsche Bank’s economists now expect the Fed to raise interest rates twice in 2026, reversing earlier expectations that monetary policy would ease. The shift removes a key support that had underpinned institutional demand for bitcoin and other risk assets, the report said.

U.S. spot bitcoin ETFs have recorded six consecutive weeks of net outflows totaling about $6 billion, Deutsche added. Because ETF demand has become a major driver of bitcoin price formation, the reversal in flows is amplifying downside pressure.

Laboure also pointed to growing competition from artificial intelligence investments, with U.S. tech giants expected to spend more than $700 billion on AI infrastructure in 2026. Investors increasingly view bitcoin and AI-linked equities as competing destinations for speculative capital.

“The marginal buyer is no longer a retail investor but an ETF allocator or corporate treasury,” the analyst wrote, adding that those investors are increasingly weighing bitcoin against AI-related opportunities.

Bitcoin was trading 3.5% lower over 24 hours, around $62,600, at time of publication.

Read more: Bitcoin inflows slow sharply in 2026 as investors chase AI, Bernstein says