Bitcoin prices tend to be volatile, but analysts with Deutsche Bank said in a note on Wednesday that the latest drop was “triggered by” Trump’s nomination of Kevin Warsh, as the new chair of the Federal Reserve. Some believe he will take a more “hawkish” approach, keeping interest rates higher, whereas looser monetary policy tends to support investment in assets such as crypto currencies.
Bitcoin prices have been trending down for the last four months, Deutsche noted, and there has been growing negative sentiment around cryptocurrency more broadly.
“This steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing,” it said.
While Deutsche does not expect crypto to disappear, it also did not predict Bitcoin would return to Trump-driven highs.
The bank said the digital token was moving from being a “purely speculative asset” into a more realistic phase as an asset that “needs to find its specific role”.
William Barhydt, chief executive of Abra Capital Management, an investment firm focused on crypto assets, agreed that cryptocurrency is maturing, but he expects prices to rebound.
“I wouldn’t say that it has to rebound, but I can’t see how it doesn’t,” Barhydt said, noting that this is not the first time Bitcoin has seen significant swings in value.
“The only way it doesn’t is if we end up in some kind of war,” Barhydt added.
Other popular cryptocurrencies are Ethereum and Solana. Their prices have both dropped roughly 37% so far in 2026.
According to CoinGecko, which tracks the performance of thousands of cryptocurrencies, the market has lost over $1 trillion in value in the last month alone and $2 trillion in value since the market peaked in October.
Stifel, a US-based investment and research firm, said in a note to investors that Bitcoin prices may drop as low as $38,000. The firm pointed to a new trend of cryptocurrency more closely following the prices of the US Dollar.
Last week, the dollar dropped to its lowest point in four years.