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The price of bitcoin plunged another 11% to $67,000 on Thursday, continuing a dramatic downward trajectory that has erased nearly half its value since early October. The world’s original cryptocurrency has now fallen below the levels seen when Donald Trump was elected to his second term, effectively wiping out a year’s worth of gains.
Bitcoin hit an all-time high of $126,210.50 on October 6, according to data from Coinbase. By Thursday afternoon, it was trading at $66,301, representing a steep decline that has rattled cryptocurrency markets across the board.
The cryptocurrency had enjoyed a substantial rally following Trump’s victory in November 2024, with investors betting on a more favorable regulatory environment under his administration. However, those expectations now appear to be colliding with economic realities and ongoing regulatory uncertainties.
Market analysts attribute the sell-off to a broader retreat from speculative assets, including precious metals like gold and silver. Investors seem to be reducing exposure to higher-risk investments despite Trump’s pro-cryptocurrency stance since taking office.
The decline comes amid evolving discussions about cryptocurrency regulation in Washington. This week, the White House convened a meeting between traditional banks and cryptocurrency companies to explore potential common ground on pending legislation concerning stablecoins.
A key point of contention involves whether cryptocurrency platforms should be permitted to pay customers yields or dividends for holding crypto deposits. The traditional banking sector strongly opposes such a move, fearing it would divert funds away from the conventional banking system. Current indications suggest the relevant bill is unlikely to advance in Congress, creating additional uncertainty for the industry.
The impact of bitcoin’s decline extends beyond the digital currency itself. Spot bitcoin ETFs (exchange-traded funds), which have become popular investment vehicles for those seeking exposure to cryptocurrency without directly owning it, have experienced significant outflows. According to Morningstar Direct, investors withdrew approximately $5.7 billion from these funds between November and January.
Companies with direct exposure to cryptocurrency markets have been hit particularly hard. Coinbase Global, a leading cryptocurrency exchange platform, fell 9.1%, while popular trading app Robinhood Markets dropped 8.1%. Bitcoin mining company Riot Platforms saw a steeper decline of 10%.
Strategy (formerly MicroStrategy), which has made bitcoin acquisition its primary business focus, tumbled 13% on Thursday. The company reports holdings of 713,502 bitcoin on its website, purchased at an average price exceeding $76,000 per coin. This positions Strategy underwater on its massive investment, with current holdings valued at approximately $47.8 billion against an acquisition cost of $54.3 billion.
Even Trump-aligned cryptocurrency ventures have not been spared. American Bitcoin, in which Eric Trump and Donald Trump Jr. hold stakes, fell 6.6% and has lost more than 80% of its value since October 7. The World Liberty Financial token ($WLFI) has seen its market capitalization nearly halved from above $6 billion in mid-September to about $3.25 billion currently, according to cryptocurrency tracking site coinmarketcap.com.
Perhaps most symbolic of the sector’s volatility, a meme coin named after President Trump ($TRUMP) is now trading at just $3.93, a dramatic decline from its $45 pre-inauguration price in January.
The continued downward pressure on cryptocurrency markets highlights the sector’s ongoing volatility despite increasing mainstream acceptance and political support, leaving investors to question whether the current downturn represents a temporary correction or a more fundamental reassessment of digital assets’ value.
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10 Comments
The drop in Bitcoin price is certainly eye-catching. I wonder how this will impact mining operations and the broader crypto ecosystem. Regulatory uncertainty seems to be weighing heavily on investor sentiment.
You make a good point. Regulatory issues have been an ongoing challenge for crypto, and that likely plays a role in the current volatility.
The decline in Bitcoin price is concerning, but not entirely unexpected given the broader shift away from speculative assets. Investors should approach the crypto market with appropriate risk management.
This drop in Bitcoin price is certainly concerning for miners and other industry players. I wonder if this will spur renewed regulatory scrutiny and policy debates around cryptocurrencies.
That’s a good question. Increased regulatory pressure could exacerbate the current volatility and create further headwinds for the crypto sector.
It’s interesting to see how Bitcoin’s performance is tracking with the broader shift away from speculative assets. This volatility highlights the risks inherent in the crypto market.
Agreed. The crypto market continues to be highly speculative, and investors would do well to approach it with caution.
It will be interesting to see how this latest drop in Bitcoin price impacts mining operations and profitability. The industry may need to adapt to the changing market conditions.
Absolutely. Miners will likely have to re-evaluate their strategies and investments to navigate this volatile environment.
The price fluctuations in Bitcoin are a reminder of the inherent risks in the crypto market. Investors should exercise caution and do their due diligence before participating.