Bitcoin (BTC) is facing renewed skepticism about its status as "digital gold" following a sharp sell-off and conflicting market behavior, according to Stifel's chief equity strategist Barry Bannister. The cryptocurrency, which rallied to record highs during the 2020-2025 bull market, has lost over 57% of its value since October 2025 peaks, trading at $68,460 as of February 2026. Bannister argues Bitcoin now mirrors high-liquidity speculative assets like tech stocks rather than serving as an inflation hedge. Stifel analysts project a potential downside target of $38,000 to $40,000, citing historical drawdown patterns. The strategist noted Bitcoin's recent correlation with U.S. dollar weakness—unlike its inverse relationship over the past decade—suggesting shifting investor psychology.

The analyst framed Bitcoin as a "liquidity-driven trade" rather than a defensive asset, warning that declining market multiples and tighter monetary policy could pressure speculative segments. Bannister compared crypto markets to the Nasdaq 100, emphasizing that unsustainable valuations and rate-sensitive assets face heightened risks. His remarks follow Stifel's earlier Bitcoin price target warning and coincide with broader market volatility, including a 0.8% Bitcoin decline in the past 24 hours.

Bannister's critique challenges the narrative that Bitcoin behaves like gold during stagflation. He highlighted that gold typically outperforms during high inflation with stagnant growth, whereas Bitcoin's recent declines amid dollar weakness contradict this historical parallel. The strategist urged caution, advising investors to treat Bitcoin as a high-risk bet rather than a stable store of value.

This divergence from traditional safe-haven assets underscores Bitcoin's evolving role in portfolios. As central banks signal potential rate cuts, market participants must reassess whether crypto aligns with their risk tolerance. For now, Stifel's analysis positions Bitcoin as a cautionary tale in volatility, with $38,000 emerging as a critical psychological level for traders monitoring its recovery trajectory.