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Jefferies identifies limited indications of a cryptocurrency bottom but notes potential for tokens with strong fundamentals.
Bank reports institutional de-risking persists, yet resilient network activity and increasing TradFi adoption may enhance revenue-linked assets over time
Key points:
- Jefferies indicates that the recent crypto market downturn shows minimal signs of an impending bottom, even while bitcoin and ether are trading at levels that have previously attracted buyers looking for dips.
- The bank describes the decline as a liquidity-driven, risk-off adjustment rather than a collapse in blockchain fundamentals, noting stable network engagement and selective corporate accumulation of bitcoin.
- While cautioning that selling from major holders and outflows from spot ETFs pose immediate challenges, Jefferies predicts that longer-term factors such as regulatory advancements and increased involvement from traditional finance could encourage more selective growth in revenue-linked tokens instead of a broad market recovery.
Jefferies indicates that the recent crypto market downturn shows minimal signs of an impending bottom, even while bitcoin and ether are trading at levels that have previously attracted buyers looking for dips.
In a research note this week, the bank characterized the decline as a liquidity-driven adjustment rather than a collapse in blockchain activity, pointing to ongoing network engagement and selective corporate accumulation of bitcoin as evidence that the sector’s foundational infrastructure remains robust.
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This occurs as bitcoin trades near $64,800, approximately 47% below its October 2025 peak of around $123,500, while ether is priced around $1,900, nearly 60% lower than its previous cycle highs.
Jefferies noted that sharp price drops have revived familiar “crypto winter” narratives, but contended that the current weakness is more closely associated with a broader risk-off sentiment in global markets and a shift away from growth assets than with any decline in blockchain fundamentals. Over $2 billion in recent long liquidations has further intensified day-to-day volatility across prominent tokens.
The bank emphasized that selling from large bitcoin holders and ongoing spot ETF net outflows represent key near-term challenges, suggesting that institutional portfolio rebalancing is putting more pressure on prices than retail activity.
Concurrently, Jefferies observed that smaller and mid-sized holders seem to be maintaining their positions rather than exiting aggressively, and that trading volumes on centralized exchanges as well as decentralized lending activities have started to stabilize following recent fluctuations.
Despite its cautious stance, the report refrains from adopting a fully bearish perspective. Jefferies stated that long-term drivers such as regulatory advancements, maturation of infrastructure, and increased engagement from traditional finance could ultimately rekindle interest in tokens associated with revenue-generating blockchains, resulting in a wider performance divergence rather than a uniform recovery.
