Bitcoin is on track for its fifth consecutive weekly decline, the longest losing streak since the nine-week slide from March to May 2022. The proximate cause is geopolitical tension: escalating Middle East conflict has lifted the dollar index to 97.7 and pushed WTI crude from $62 to $65, tightening financial conditions and pressuring risk assets.
But the geopolitical framing, while accurate, obscures a more fundamental problem. Bitcoin is trading like a leveraged tech stock during a risk-off event—exactly the behavior BlackRock’s Robert Mitchnick warned about last week. It’s underperforming gold for the seventh consecutive month, the longest stretch on record. It’s down more than 50% from its October all-time high. And it’s doing all of this while the narrative infrastructure—ETFs, institutional adoption, regulatory clarity—is supposedly stronger than ever.
The losing streak matters less than what it reveals: bitcoin’s correlations are breaking in the wrong direction. It’s not acting like a hedge. It’s not acting like digital gold. It’s acting like a high-beta risk asset with no fundamental support when macro conditions tighten. Geopolitical risk is the catalyst, but the underlying fragility was already there.
The Immediate Picture: Geopolitics and Risk-Off
The setup is straightforward. The U.S. has deployed its largest concentration of air power in the Middle East since the 2003 Iraq invasion. According to the Wall Street Journal, Washington is prepared to launch strikes on Iran, though President Trump hasn’t made a final decision. Polymarket bettors are pricing a 27% probability of strikes by the end of February.
This geopolitical uncertainty has triggered classic risk-off positioning: dollar strength, oil rally, and selling in risk assets. The dollar index hit 97.7, its highest level since February 6. WTI crude climbed to $65 from a Wednesday low of $62. Both moves tighten financial conditions—a stronger dollar makes dollar-denominated debt more expensive to service globally, and rising oil prices increase input costs and inflation expectations.
Bitcoin, as of Thursday Asia time, is down roughly 3% on the week, trading below $67,000. If it closes the week in the red, it will mark the fifth consecutive weekly decline—a streak last seen in March to May 2022, when bitcoin fell for nine consecutive weeks during the Federal Reserve’s rate hiking cycle.
The geopolitical framing is clean: uncertainty drives safe haven flows, and bitcoin isn’t a safe haven. But this explanation only works if you accept that bitcoin is supposed to behave like a risk asset in the first place. And that acceptance undermines the core narrative that drove institutional adoption over the past two years.
The Bigger Pattern: Five Months of Losses, Seven Months of Gold Underperformance
The weekly losing streak is part of a broader deterioration. Bitcoin has declined for five consecutive months since October, the second-longest losing streak on record, surpassed only by the six-month slide from 2018 to 2019.
Against gold, bitcoin has underperformed for seven consecutive months, the longest stretch on record for that pairing. This is the metric that matters most. Gold and bitcoin are supposed to be competing stores of value—scarce assets that hold purchasing power when fiat currencies debase. When gold outperforms bitcoin for seven straight months, the market is signaling that it trusts gold’s scarcity and stability more than bitcoin’s.
This divergence started before the current geopolitical flare-up. It began in mid-2025, when global liquidity conditions started tightening and macro uncertainty increased. Gold rallied. Bitcoin fell. The pattern has persisted for months, which means it’s not a short-term rotation—it’s a structural repricing of risk.
Arthur Hayes argued last week that gold’s outperformance signals a coming credit crisis. That interpretation is plausible but unprovable. The simpler explanation is that investors are treating gold as a hedge and bitcoin as a speculative bet. When uncertainty rises, they buy the hedge and sell the speculation.
That’s not what the bitcoin-as-digital-gold narrative predicted. The narrative said bitcoin would act like gold with better upside. Instead, it’s acting like NASDAQ with worse downside protection.
What “Risk-Off” Actually Means for Bitcoin
The term “risk-off” describes a market environment where investors reduce exposure to assets with uncertain cash flows, high volatility, or leverage. Classic risk-off assets include U.S. Treasuries, gold, the dollar, and Swiss francs. Classic risk-on assets include emerging market equities, high-yield bonds, and speculative growth stocks.
Bitcoin, during the 2020-2021 bull run, was marketed as neither. It was positioned as a non-correlated hedge—an asset that would perform well when fiat currencies debased, regardless of whether markets were risk-on or risk-off. The pitch was: bitcoin is scarce, decentralized, and outside the traditional financial system, so it moves independently.
That pitch is breaking down. Bitcoin is now trading as a pure risk-on asset. When geopolitical uncertainty spikes, it sells off. When the dollar strengthens, it sells off. When oil rallies and financial conditions tighten, it sells off. It’s correlated with NASDAQ, inversely correlated with the dollar, and underperforming gold.
This isn’t new information—bitcoin’s correlation with equities has been rising for years—but the duration of the current losing streak makes it impossible to ignore. If bitcoin can’t hold up during five weeks of moderate geopolitical tension, what happens during a real crisis?
The Institutional Adoption Paradox
Here’s the paradox: institutional adoption is at all-time highs, but bitcoin’s price is collapsing.
BlackRock’s IBIT is one of the most successful ETF launches in history. Spot bitcoin ETFs now hold hundreds of thousands of BTC. Coinbase, despite its Q4 miss, has a $14 billion balance sheet and continues buying bitcoin with operating income. Regulatory clarity in the U.S. is improving, with stablecoin legislation passed and crypto market structure bills advancing (despite the stablecoin yield fight).
All of these are bullish developments for long-term adoption. But none of them are supporting the price. Bitcoin is down 50% from its October high, on track for its fifth consecutive weekly loss, and underperforming gold by the widest margin on record.
The standard explanation is that adoption is a long-term story and price is a short-term distraction. But this framing ignores the feedback loop. If institutional allocators see bitcoin falling 50% during a period of improving fundamentals and increasing adoption, they’ll question whether the fundamentals actually matter.
Why would a pension fund allocate to an asset that loses half its value in five months while institutional infrastructure is being built out? The narrative says bitcoin is scarce and non-correlated. The data says it’s volatile and correlated with risk assets. Which signal do you trust?
The Leverage Problem, Again
BlackRock’s Mitchnick pointed to perpetual futures platforms as the source of bitcoin’s volatility problem. The current losing streak supports that claim.
Bitcoin’s decline from $126,000 to $60,000 wasn’t driven by fundamentals—there’s been no major negative news on adoption, regulation, or network security. It was driven by leverage cascades. Perpetual futures open interest collapsed during the October 10 selloff and again during recent volatility. Funding rates spiked. Liquidations exceeded spot trading volumes.
The geopolitical news this week is real, but the price impact is being amplified by leverage unwinds on offshore platforms. When Iran tensions rise, traders on 100x leverage get liquidated, triggering cascading sells that push the spot price down further. The geopolitical catalyst is real, but the magnitude of the move is synthetic—it’s a function of market structure, not fundamentals.
This is the dynamic Mitchnick warned would undermine institutional adoption. If bitcoin drops 3% on moderate geopolitical news because of leverage cascades, it’s not a stable hedge—it’s a fragile speculation. And institutional allocators don’t add fragile speculations to balanced portfolios.
The 2022 Comparison: Different Catalysts, Same Structure
The last time bitcoin logged a five-week (or longer) losing streak was March to May 2022, during the Federal Reserve’s aggressive rate hiking cycle. That period saw nine consecutive weekly declines, driven by tightening monetary policy, collapsing risk appetite, and the implosion of Terra/Luna.
The current losing streak has different catalysts—geopolitical tension rather than Fed policy—but the same structural vulnerabilities. In both cases, bitcoin sold off because financial conditions tightened and risk appetite collapsed. In both cases, leverage amplified the decline. In both cases, bitcoin underperformed gold.
The difference is that in 2022, institutional adoption was nascent. Spot bitcoin ETFs didn’t exist. Coinbase’s institutional business was smaller. The narrative was weaker. In 2026, institutional adoption is far more advanced, but bitcoin’s price performance is arguably worse relative to narrative strength.
This suggests the problem isn’t adoption—it’s market structure. Bitcoin’s price discovery is still dominated by offshore perpetual futures platforms, even though institutional flows are growing. Until that changes, volatility will remain extreme, and institutional allocators will remain cautious.
What the Streak Actually Signals
The five-week losing streak doesn’t tell us much about bitcoin’s long-term trajectory. It tells us about current positioning and market structure:
1. Bitcoin is treated as a high-beta risk asset, not a hedge. When uncertainty rises, it sells off with equities, not with gold.
2. Leverage is still the dominant driver of short-term price action. Geopolitical news triggers liquidations, which amplify the move beyond what fundamentals would justify.
3. Institutional adoption hasn’t yet stabilized price behavior. ETFs bring long-term holders, but they don’t control price discovery, which still happens on perps.
4. Gold is winning the store-of-value narrative, at least for now. Seven consecutive months of underperformance is a vote of no confidence in bitcoin’s scarcity story.
None of these observations are new, but the duration of the losing streak makes them harder to dismiss as noise. This is the market sending a clear signal: bitcoin is not behaving like the asset it’s supposed to be.
The Path Forward: More Pain or Capitulation?
If geopolitical tensions escalate—U.S. strikes on Iran, broader Middle East conflict, oil spiking above $70—bitcoin will likely continue selling off. Risk-off flows will strengthen the dollar, tighten financial conditions, and pressure leveraged positions on perps. The losing streak could extend to six, seven, or more weeks.
If tensions de-escalate—diplomacy prevails, oil retreats, the dollar weakens—bitcoin could stabilize and attempt a recovery. But even in that scenario, the structural problems remain: leverage fragility, correlation with risk assets, and underperformance relative to gold.
The losing streak will end eventually, either through capitulation (final flush-out of leveraged longs) or through a catalyst (Fed pivot, liquidity injection, geopolitical resolution). But ending the streak doesn’t solve the narrative problem. Bitcoin needs to demonstrate that it can act like a hedge during uncertainty, not just during liquidity expansion.
So far, it’s failing that test.
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