Stifel Flags $38K as Possible Bitcoin Low as Fed Hawkishness and Dollar Decoupling Bite

Bitcoin’s slide from its October peak near $126,000 hasn’t found conviction on the bid. Stifel thinks the tape could get heavier before it heals, sketching a potential path to $38,000 over the coming months. With spot near $65,433 per CoinGecko—about 42% above that level—the gap is meaningful but not outside historical drawdown math.

Here’s the fulcrum: the market’s narrative about what Bitcoin is actually hedging appears to be shifting. Over the past year, the asset hasn’t enjoyed the usual tailwind from a weaker dollar or rising global dollar liquidity—relationships that, in prior cycles, reliably supported rallies. Layer in a tougher Federal Reserve posture and a tech tape flirting with highs yet showing credit strain around AI buildouts, and you get a setup where crypto’s “macro hedge” aura is being questioned in real time.

Stifel’s framework leans on cycle symmetry. Prior “super-bear” peak-to-trough moves registered roughly: - 2011: −93% - 2014: −84% - 2018: −83% - 2022: −76%

Those progressively shallower lows support a modeled worst-case 70% drawdown today. That’s the house view on the downside—not a base case, but a boundary worth respecting if macro volatility forces a re-rating.

Policy is the catalyst map. December’s rate cut came with hawkish signaling, and the Fed held rates again earlier this month, leaning into a data-dependent stance that prioritizes inflation control over reflation excitement. If FOMC voters explicitly telegraph that they won’t facilitate an “inflationary boom” in an economy clouded by tariffs—regardless of who chairs the Fed—Stifel argues that could anchor a durable bottom. The tone would echo Chair Powell’s 2022 Jackson Hole line that “there will be pain” to break post-pandemic inflation. Markets heard an even tighter signal Friday when Donald Trump nominated Kevin Warsh—often seen as an inflation hawk—to succeed Powell, and Bitcoin’s selloff accelerated.

The more consequential datapoint, in my view, is the decoupling from the dollar and liquidity. When an asset that many investors frame as fiat insurance stops responding to a weaker greenback and expanding dollar liquidity, managers start questioning the hedge thesis. That triggers behavior changes: risk committees tighten, basis trades unwind faster, and cross-asset models push Bitcoin back into the “high beta tech” bucket. None of this requires spot selling to start; it just removes the marginal buyer who previously leaned on DXY and liquidity screens.

That helps explain why tech correlation matters here. Stifel highlights that higher inflation expectations and emerging credit stress from large AI investments have pressured growth equities. Bitcoin tends to travel with that cohort. More telling, they call the widening gap between Bitcoin and the Nasdaq 100 since October “ominous.” If equities break from their near‑highs, crypto could overshoot to the downside; if equities hold, crypto’s underperformance still chips away at the “digital hedge” narrative.

What would turn the tape? Clear, credible Fed communication that inflation control remains paramount—specifically, no tolerance for an “inflationary boom”—would reduce the policy-path variance that’s been taxing risk premia. Combine that with evidence that tariffs aren’t re-accelerating inflation expectations, and the hedge narrative can rebuild. Until then, the market will likely treat Bitcoin as cyclical risk with reflexive liquidity, not as a simple fiat debasement hedge.

Stifel’s $38,000 marker isn’t prophecy; it’s a stress point informed by history and today’s macro plumbing. If the dollar/liq link stays muted and tech wobbles, price can drift toward that band. If policy clarity tightens and the growth‑inflation mix cools, the same reflexivity can work the other way just as quickly.