Bitcoin Sees Cooling Inflows as AI Sector Becomes Investor Favorite, Says Bernstein

Bernstein said Bitcoin’s increasingly diversified ownership base continues to support its long-term store-of-value narrative.

The Wall Street broker argues that Bitcoin’s recent weakness is being driven mainly by softer capital inflows rather than concerns over quantum computing or other structural risks.

Worries about future quantum computing advances—which could potentially break Bitcoin’s cryptographic security—have resurfaced in crypto discussions, especially after Google research suggested the computing power needed to challenge blockchain systems may be lower than previously thought.

Bernstein noted that Bitcoin treasury firms and spot ETFs have attracted around $12 billion in inflows so far in 2026, down sharply from about $60 billion in 2025. ETFs alone have recorded roughly $2.6 billion in net outflows from a $75 billion asset base, with most of the remaining demand coming from corporate buyers led by Strategy.

The analysts said the slowdown is largely due to retail investors rotating into AI-related opportunities, pointing out that some of the strongest-performing crypto segments this year have been tied to tokenized equities and commodities.

Still, they added, “Bitcoin still may offer some diversification from the unusual singular AI driven momentum markets we have experienced this year.”

Bernstein also suggested that relatively modest ETF outflows are a constructive sign, indicating Bitcoin ownership is becoming less reliant on short-term, momentum-driven retail flows.

Bitcoin has been under pressure in recent months, sliding from around $82,000 in early May to about $63,000, a drop of more than 20%. It briefly fell below $60,000 last week, its lowest level since October 2024, and remains roughly 50% below its October 2025 peak near $126,000.

The decline has been linked to ongoing ETF outflows, weaker risk appetite, and a broader shift of capital toward AI-focused equities and high-profile stock offerings.

Unlike earlier market cycles dominated by retail speculation, today’s investor base includes ETFs, corporate treasuries, wealth managers, pension funds, and sovereign investors—creating a more diversified and potentially more stable structure.

While Bitcoin has lagged AI-driven market momentum this year, Bernstein argued that its lack of hype does not weaken the long-term investment case and may even reflect a healthier market structure.

Citing Citi research, spot Bitcoin ETF flows are estimated to drive roughly 45% of weekly price movements, highlighting their importance as a key demand indicator.

At the time of writing, Bitcoin was trading near $62,600.