Bitcoin Price Weakness Linked to Slower Capital Inflows, Not Quantum Computing Fears: Bernstein

Bitcoin's recent price decline is being driven primarily by weaker capital inflows rather than concerns about quantum computing threats, according to a new report from Wall Street brokerage Bernstein.

The discussion around quantum computing and its potential ability to break Bitcoin's cryptographic security has gained attention in recent months. Concerns intensified after Google research suggested that the computing power required to crack certain encryption methods could be lower than previously estimated. However, Bernstein analysts believe these concerns are not the main factor behind Bitcoin's current market performance.

Instead, the brokerage points to slowing investment flows into Bitcoin-related products. Bitcoin exchange-traded funds (ETFs) and corporate treasury buyers have attracted approximately $12 billion in inflows so far this year, a significant drop from the $60 billion recorded in 2025. Spot Bitcoin ETFs have experienced around $2.6 billion in net outflows from a total asset base of roughly $75 billion.

Bernstein analysts, led by Gautam Chhugani, said investor attention has increasingly shifted toward artificial intelligence (AI) opportunities. Capital has been flowing into AI-focused stocks and other high-growth sectors, while some of the strongest-performing areas within the digital asset market have been linked to tokenized equities and commodities.

Despite the slowdown, Bernstein views the relatively limited ETF outflows as a positive sign. The firm argues that Bitcoin ownership is becoming more diversified and less dependent on short-term retail speculation. Today's investor base includes ETFs, corporate treasuries, wealth-management firms, pension funds, and sovereign investors, creating a stronger market foundation compared to previous cycles.

Bitcoin has faced significant pressure in recent months, falling from approximately $82,000 in early May to around $62,600 at the time of publication. The cryptocurrency briefly dropped below $60,000 last week, marking its lowest level since October 2024. Bitcoin also remains roughly 50% below its all-time high of nearly $126,000 reached in October 2025.

Analysts continue to cite ETF outflows, reduced risk appetite, and investor preference for AI-related investments as major reasons for the downturn. Nevertheless, Bernstein maintains that Bitcoin's role as a long-term store of value remains intact. The firm noted that while Bitcoin may appear less exciting than AI-driven investments, its stability and growing institutional adoption could ultimately support a healthier and more resilient market structure.

Meanwhile, Citi recently reported that spot Bitcoin ETF flows account for nearly 45% of weekly Bitcoin price movements, highlighting their importance as a key indicator of cryptocurrency adoption and investor sentiment heading into 2026.