Bitcoin has exhibited a lacklustre performance relative to other “risk-on” assets this year — and if historical trends hold, its price may decline to as low as $38,000 by October. According to a recent report, the current decline in the asset can be attributed to supply mechanics rather than risk sentiment. Bitcoin’s price has historically correlated with technology stocks; however, 2026 presents a divergence: while AI-related equities have experienced significant gains, the cryptocurrency markets have faced a downturn. Bitcoin was recently priced at $64,809, reflecting a decline of nearly 30% year-to-date and approaching 50% lower than its October all-time high of $126,080.
“Bitcoin’s 2025–2026 drawdown is bringing the 4-year cycle narrative back into focus, because the timing and structure increasingly resemble the prior reset years of 2014, 2018, and 2022 even though the path has not matched those drawdowns exactly,” the report read. NYDIG revealed that Bitcoin’s year-to-date performance positions it as the worst-performing asset, underperforming relative to US treasuries, silver, and currencies such as the Swiss Franc. It added that if Bitcoin’s price action were to align with other drawdowns — such as the bear market of 2022 — a “potential cycle low near $38k-$39k” was conceivable. The positive development: Bitcoin experienced its lowest volatility year on record in 2025, with certain analysts suggesting that this year’s decline could be less severe than those observed in prior bear markets.
NYDIG noted that Bitcoin’s rolling correlation with gold heightened during the second quarter of 2026, as both assets underwent sell-offs. Bitcoin has exhibited a correlation with the precious metal historically, and proponents of Bitcoin have referred to the leading digital currency as “digital gold.” However, the asset exhibited a higher correlation with US equities last year, particularly with technology stocks. NYDIG noted that other commodities underwent sell-offs in the second quarter of 2026, as the so-called debasement trade began to lose momentum. Traders in 2025 referred to the “debasement trade” as a strategic manoeuvre to protect against the depreciation of the dollar and other fiat currencies.
Bitwise stated in a report last week that although Bitcoin concluded Q2 2026 in its most profound and extended downturn since the previous bear market, the underlying fundamentals are positioned for a swift recovery, bolstered by regulators enacting crypto-friendly legislation. NYDIG added that the passing of the market-structure CLARITY Act “is the most important forward catalyst for the digital asset industry.” It noted “For Bitcoin, CLARITY’s direct price impact is less significant than for altcoins and crypto equities, but the investment implication remains material because a clearer U.S. market-structure regime would benefit the entire industry.”