LONDON: Bitcoin is headed for its worst performance this year in at least a decade, as a series of flashy upcoming new listings like fast-rising AI stocks and SpaceX are driving capital away from the world’s largest cryptocurrency.
Its price has fallen nearly 15% this week, the most since November 2022, when trading platform FTX imploded. LSEG data shows Bitcoin’s value has declined by a third to about US$63,000 (RM252,652) so far in 2026, more this year than at any time since at least 2015.
Adding to the pressure, Michael Sellar Strategy, the largest corporate holder of Bitcoin, revealed on Monday that it had sold some holdings for the first time since 2022.
“It’s instructive to see how assets can struggle as they go from being the flavor of the month to suddenly going out of fashion,” Mark Dowding, chief investment officer, fixed income at RBC Bluebay Asset Management, said in a blog.
Here’s how the landscape is changing for Bitcoin, which hit a record high of more than US$125,000 late last year.
the price is not right
Bitcoin is about 40% lower than it was when US President Donald Trump took office in January 2025, who vowed to make the US the crypto capital of the world. A series of crypto-friendly appointments to key roles in regulatory and financial roles boosted Bitcoin sentiment at the time.
But with large institutional players and investment banks, as well as liquid exchange-traded products, the things that made Bitcoin so attractive as a potential portfolio diversifier – its high volatility and lack of correlation with other asset classes – have diminished.
Crypto options trading platform Deribit’s DVOL index of implied volatility in Bitcoin options is currently around 47, the highest since the beginning of April, but not much above the record low of 31 in late May. From its launch in 2021 until around April last year, the index barely dropped below 50.
In terms of correlation, before 2020, Bitcoin had no set relationship with the S&P 500. But for most of the past six years, the two have moved in lockstep. This relationship has recently turned deep into negative territory, as AI-powered stocks have been surging while Bitcoin has lagged behind.
Competition between stablemates
Gone are the days when Bitcoin occupied most of the crypto market. According to CoinGecko, the ecosystem is now buzzing with larger rival coins and smaller “alt-coins” like Ether, Solana, and BNB, which now make up a fifth of the total market.
The rise of stablecoins pegged to fiat currencies like the US dollar has also hurt Bitcoin’s market share.
According to CoinGecko, Bitcoin’s share of the crypto market is 56%, compared to 63% a year ago. The market share of Ether and alt-coins has remained almost stable, with stablecoins now having about 13% of the market, compared to about 7% a year ago.
Even on a daily basis, volume in top stablecoin Tether exceeds that of Bitcoin and Ether, while runner-up USDC has volume equal to that of the next 10 coins combined, according to CoinGecko data.
follow the money
It’s not just other cryptos that Bitcoin has to compete with for investor cash. As the AI story began to move forward, with the launch of ChatGPT in late 2022, Bitcoin benefited from an investment influx looking for all things related to the tech.
AI now dominates stock markets, hyperscalers opening datacenters, nuts-and-bolts makers of semiconductors, chips and even copper wire making money.
In the past year, US semiconductor stocks have risen 170%; Bitcoin has suffered a loss of 40%. Capital moving into AI-related stocks will have to come from somewhere.
LSEG data shows investors are cashing out of large Bitcoin ETFs at the fastest pace on record, with net outflows of more than US$2.7 billion in the week to Thursday. This brings the net outflow so far for 2026 to US$3.1 billion.
The four largest semiconductor ETFs – VanEck’s Semiconductor ETF, Roundhill Memory ETF, State Street’s SPDR S&P Semiconductor ETF and iShares Semiconductor ETF – have drawn in more than US$3 billion in the first week of June alone and more than US$21 billion so far this year.
