NEW YORK: Bitcoin is heading for its weakest performance at this stage of the year in at least a decade, as investor capital continues to rotate aggressively toward artificial intelligence stocks, semiconductor companies and anticipated mega listings such as SpaceX.
The world’s largest cryptocurrency has come under intense selling pressure in recent days, reviving doubts about its role as both a high-growth technology investment and a digital safe-haven asset.
Bitcoin has fallen roughly 15% in the past week, its steepest weekly decline since November 2022, when the collapse of FTX rocked global crypto markets. Trading near $63,000, bitcoin is now down about 33% year-to-date in 2026, according to LSEG data, marking its worst start to a year since at least 2015.
Sharp retreat from record highs
Friday’s losses deepened the downturn, with bitcoin sliding to around $62,500, more than 50% below its all-time high of $126,000 reached in October 2025. The cryptocurrency is hovering just above the psychologically significant $60,000 level, which it has not breached since September 2024.
Corporate selling weighs on sentiment
Additional pressure emerged after Strategy, led by Michael Saylor, disclosed it had sold a portion of its bitcoin holdings. The move marked the company’s first reduction in exposure since 2022 and dented investor confidence at an already fragile moment.
Market participants said the sale amplified existing concerns as bitcoin had already slipped to April lows earlier in the week.
AI boom overshadows crypto
Analysts point to the explosive growth of artificial intelligence as a key factor diverting speculative capital away from digital assets.
When ChatGPT launched in late 2022, bitcoin initially benefited from technology-focused inflows. Today, however, AI dominates global markets as investors pile into chipmakers, data-centre operators and memory manufacturers.
Over the past year, US semiconductor stocks have surged by nearly 170%, while bitcoin has dropped around 40% over the same period.
ETF outflows accelerate
According to LSEG, investors pulled more than $2.7 billion from major bitcoin exchange-traded funds during the week ending Thursday, pushing total net ETF outflows in 2026 to approximately $3.1 billion.
In contrast, four major semiconductor ETFs attracted more than $3 billion in a single week in early June and roughly $21 billion so far this year, highlighting a stark shift in investor preference.
Bitcoin’s evolving identity
Analysts say bitcoin’s growing institutional adoption has altered its risk profile. As banks, asset managers and regulated products enter the market, some of bitcoin’s appeal as a volatile, uncorrelated asset has faded.
The Deribit DVOL index, which tracks implied volatility in bitcoin options, stands near 47, well below historical averages and only slightly above record lows reached in late May.
Correlation with stocks weakens
While bitcoin and US equities moved closely together for much of the past six years, that relationship has weakened sharply in recent weeks.
Rajiv Sawhney, head of international portfolio management at Wave Digital Assets, said bitcoin has failed to track record highs in US stock markets, prompting renewed debate over whether it should behave like “digital gold” or a high-growth tech asset.
Rising competition within crypto
Bitcoin is also losing ground within the digital asset ecosystem itself. Rivals such as Ether, Solana and BNB continue to gain traction, while stablecoins now account for nearly 13% of the crypto market, up from 7% a year ago, according to CoinGecko.
Bitcoin’s market dominance has slipped to 56% from 63%, while trading volume in stablecoins such as Tether and USDC now exceeds that of many major cryptocurrencies combined.
Regulatory delays and global risks
Investor sentiment has also been dampened by uncertainty around US cryptocurrency legislation, including delays to the proposed Clarity Act, which many had hoped would attract fresh institutional capital.
Geopolitical tensions, including uncertainty linked to Iran, have further challenged bitcoin’s narrative as a hedge during global instability.
Some remain optimistic
Despite the sell-off, some investors remain bullish. Speaking on CNBC, Strive Chief Executive Matt Cole noted that bitcoin has reached its 200-week moving average only for the fifth time in its history.
He argued that each previous instance marked a strong long-term buying opportunity.
For now, however, bitcoin remains under pressure as investors chase faster-growing opportunities in artificial intelligence, semiconductors and other high-momentum sectors.
