Bitcoin News Today: Bitcoin Slumps Below $87,500 as ETF Outflows and Dollar Weakness Fuel Uncertainty

Bitcoin bulls are watching a potential tailwind as the U.S. dollar index continues to fall. This trend has historically supported Bitcoin's price movements, especially amid shifting monetary policy expectations. Meanwhile, the U.S. Dollar General has reached a $15 million settlement over price-gouging allegations, while a new federal reserve program is drawing attention from crypto analysts.

The recent developments in crypto policy are also noteworthy. Sen. Cynthia Lummis, a key advocate for digital assets and known as the "Bitcoin Senator," announced she will not seek reelection in 2027. Her exit marks a significant shift for the crypto industry, as she has been central to major legislative efforts, including the GENIUS Act and ongoing negotiations around a broader market structure bill. The crypto market structure bill, aimed at legitimizing most crypto activities in the U.S., remains stalled as industry factions struggle over its content and necessity. Lummis' retirement adds uncertainty to the bill's future, particularly as Congress moves toward the 2026 midterms.

How Markets Are Responding

Bitcoin has faced a mixed trading week, retreating below $87,500 after failing to break past the $90,000 level. The recent drop comes amid continued outflows from U.S.-listed spot ETFs, which saw a $142.90 million withdrawal on Monday. These outflows reflect a broader pullback from institutional capital, which has been more deliberate in its approach to Bitcoin compared to earlier in the year.

Meanwhile, Michael Saylor's Strategy Inc. added $748 million to its USD reserves, signaling a more defensive strategy. This move comes as the company's stock has declined by roughly 30% from October's peak. Saylor has long predicted Bitcoin will reach $1 million per coin, and even higher in the long term.

What Analysts Are Watching

Analysts remain cautiously optimistic about Bitcoin's long-term prospects. A new price model from CF Benchmarks suggests a base case of $1.42 million per Bitcoin by 2035, with a bull case pushing as high as $2.95 million. The report attributes this potential surge to institutional adoption, improved regulatory clarity, and Bitcoin's low correlation with traditional assets.

Arthur Hayes, co-founder of BitMEX, argues that the Federal Reserve's new Reserve Management Purchases (RMP) program is effectively a form of quantitative easing. He sees this as a liquidity-driven move that could push Bitcoin to $200,000 in 2026. Hayes believes the program is designed to inject more money into the system without alarming markets through direct references to money printing. This view is supported by market analysis.

Risks to the Outlook

Despite the bullish forecasts, several risks remain. Bitcoin's recent volatility has been amplified by the market's sensitivity to macroeconomic trends and regulatory developments. The U.S. dollar's decline is seen as a positive for Bitcoin, but it remains to be seen how long that trend will continue.

Regulatory uncertainty also looms. The stalled market structure bill in the Senate, combined with Lummis' retirement, could leave crypto policy in a holding pattern. If a comprehensive framework fails to pass before the 2026 midterms, the industry may face renewed uncertainty.

Security concerns are another factor. While the number of crypto hacks has declined in 2025, the nature of attacks has evolved. Supply chain breaches have become the most damaging threat, with a single incident accounting for $1.4 billion in losses. As attackers shift focus from code vulnerabilities to infrastructure-level exploits, the crypto industry will need to remain vigilant. This trend is already evident.

What This Means for Investors

For now, the market is in a holding pattern. Institutional investors are reassessing their exposure to Bitcoin, while retail traders remain cautious. The recent outflows from spot ETFs suggest a more measured approach to the asset class, as investors weigh the long-term potential against near-term volatility.

Analysts suggest that those with a long-term horizon should monitor Bitcoin's performance as the U.S. Federal Reserve continues its RMP program and global liquidity conditions evolve. While the path to $1.42 million or even $200,000 per BTC may be years away, the underlying structural trends remain intact. Market analysts point to this stability.

For now, the market will watch for regulatory developments in Washington, shifts in dollar policy, and evolving investor sentiment to gauge the next phase in Bitcoin's journey.