Bitcoin fell below the $70,000 mark on Thursday for the first time since November 2024, marking a significant downturn that eliminated all gains accrued following Donald Trump’s re-election as US president. The largest cryptocurrency saw a sharp decline of 7%, closing at just below $68,000. This downturn was part of a broader sell-off affecting digital tokens, which coincided with a notable drop in tech stocks. Year-to-date, Bitcoin’s value has plummeted by over 20%.
“Sentiment has deteriorated sharply,” commented Jasper De Maere, a strategist at trading firm Wintermute. He noted that the crypto market appears fatigued, with a noticeable lack of enthusiasm from investors to engage at current price levels. Similarly, ether, the second-largest cryptocurrency, fell 8% to $1,960, reflecting a staggering 34% decline for the year.
The price surge following Trump’s election victory stemmed from his commitment to establish the US as “the crypto capital of the world” and his efforts to rollback stringent regulations on the cryptocurrency sector. Since Trump took office last year, his administration has enacted legislation favorable to the industry and ceased several enforcement actions, which had initially propelled Bitcoin’s price to an all-time high of over $125,000 last summer.
However, the excitement surrounding Trump’s presidency has begun to fade, as investors pivot toward gold and silver, viewing these precious metals as safer long-term investments, especially considering their recent rally. Key legislative progress related to the cryptocurrency framework in the US has stalled this year, further contributing to market instability.
The decline gained momentum this week in light of a broader equity sell-off, driven by anxieties regarding the impact of artificial intelligence on technology companies. Shares in Michael Saylor’s company, which heavily invests in Bitcoin, dropped by 12% on Thursday and have plunged more than 25% this year. Saylor’s firm owns 713,502 Bitcoin, purchased at an average price of $76,052 through equity and debt issuance, resulting in substantial paper losses. Amid the downturn, Saylor took to social media platform X to share “HODL,” a popular term in the crypto community advising investors to hold onto their assets rather than sell.
In a separate but related development, cryptocurrency exchange Gemini, co-founded by the Winklevoss twins, announced plans to lay off 200 employees and scale down some operations as part of its cost-cutting measures. Their shares have declined by 80% since going public last September. On the prediction market platform Kalshi, traders have begun wagering on Bitcoin’s future prices, with approximately an 85% likelihood that it will dip below $60,000 later this year.
