Bitcoin’s trading around $86,000 as ‘Tinkerbell’ effect haunts crypto, in Deutsche Bank’s view

Core Insights - Investor belief is currently a critical factor influencing bitcoin valuations, with wavering confidence among investors posing a significant challenge for the cryptocurrency [1][2] - The "Tinkerbell effect" theory suggests that bitcoin's value is heavily influenced by investor sentiment, which has resurfaced due to recent market dynamics [2] Market Performance - Bitcoin experienced its worst weekly loss since late February, with a current price of $86,022, down 1.6% on Monday and a total decline of 31% from its record high of $126,272 on October 6 [3] Regulatory and Market Dynamics - Regulatory uncertainty has stalled momentum since summer, impacting bitcoin's portfolio integration and contributing to liquidity issues [5] - Institutional outflows have increased, leading to reduced liquidity in the market, while long-term holders are taking profits, a behavior not seen in previous downturns [5] Institutional Participation - The current downturn differs from previous crashes, as it is characterized by significant institutional participation, alongside policy developments and global macro trends [6]