Stifel, a prominent global wealth management firm, has issued a cautionary statement regarding Bitcoin, one of the foremost cryptocurrencies worldwide. They foresee a significant price drop triggered by tightening liquidity conditions, regulatory stagnation, and persistent outflows from exchange-traded funds (ETFs).
The investment company forecasts that Bitcoin could tumble sharply to approximately $38,000.
Just today, Bitcoin hit another low for 2025 at $72,185.
The Grim Bear Scenario
In their latest research report published on Wednesday, Stifel highlighted the possibility of Bitcoin experiencing an additional decline of up to 47%, potentially dragging its value down to the $38K mark.
The firm notes that current market dynamics resemble some of the harshest periods witnessed during previous crypto winters.
A primary challenge identified is the Federal Reserve’s less accommodative monetary policy stance.
Contrary to market expectations for aggressive interest rate reductions, the Fed continues maintaining elevated rates in an effort to curb persistent inflationary pressures.
This environment of high interest rates is steadily draining liquidity from speculative assets like Bitcoin, increasing its vulnerability significantly.
Moreover, hopes pinned on legislative support for cryptocurrency under the current administration appear stalled as regulatory progress in the U.S. has markedly slowed down.
This ongoing contraction in liquidity spells trouble for risk-sensitive assets such as Bitcoin.
Additionally, spot Bitcoin ETFs—which played a crucial role in fueling recent bullish momentum—have now become sources exerting selling pressure on prices.
However, analyst Eric Balchunas points out that ETF investors are largely maintaining their positions while seasoned crypto participants are more actively offloading holdings.
Despite enduring a severe 40% downturn, only about 6% of assets within Spot Bitcoin ETFs have been redeemed so far.
This remarkably low turnover rate is unusual given how volatile this asset class tends to be. It indicates that roughly 94% of institutional capital introduced through ETFs managed by firms like BlackRock and Fidelity remains intact and untouched.