Bitcoin’s value took a significant hit on Thursday, plummeting to approximately $67,000 in morning trading—a level unseen since October 2024. This decline highlights the inherent volatility of cryptocurrencies, particularly when investors pivot away from risk.
This drastic downturn marks a stark contrast to bitcoin’s previous highs, when it soared above $125,000 per coin late last year. In the four months since reaching that peak, the leading cryptocurrency has lost nearly half its value. The current market sentiment reflects a wider shift among investors, who are increasingly distancing themselves from riskier assets such as cryptocurrencies and technology stocks in favor of traditional “safe haven” investments, including gold.
Since bitcoin’s pinnacle in October, the disparity between its performance and that of gold has become increasingly pronounced. As of Thursday morning, bitcoin’s value has declined by 32% since February 2025, while gold has experienced a remarkable increase of 68%. Over the course of the year, gold prices have risen by more than 14%, while bitcoin has fallen over 20%.
As cryptocurrencies face downward pressure, the U.S. dollar is also under scrutiny, driven by renewed trade and tariff threats from the Trump administration and general uncertainty arising from geopolitical tensions, including conflicts with U.S. allies related to Greenland and the civil unrest in Iran.
In seeking safer investments, many are redirecting their funds into Treasury bonds, stocks in European and Asian markets, as well as precious metals like silver and gold. The repercussions of bitcoin’s sharp decline extend beyond the cryptocurrency itself; it presents mounting concerns for the broader crypto industry. Historically, bitcoin has been touted as “digital gold,” which is lauded for its perceived stability during turbulent times.
Analysts from Citi noted that the influx of money into bitcoin exchange-traded funds (ETFs) has significantly diminished as prices continue to fall. These ETFs were crucial in fueling bitcoin’s prior rise. Moreover, bitcoin’s current value has dipped below the average entry price for many U.S. spot bitcoin ETF investors, which Citi estimates to be around $81,600.
The downturn is especially challenging for companies and individual investors that heavily invested during bitcoin’s rally. Strategy, the largest corporate holder of bitcoin, saw its shares plummet over 10% as bitcoin approached values lower than what the company had initially paid for its crypto assets. Holding more than 713,000 bitcoin, with an average purchase price of around $76,000, Strategy faces investor anxiety about the potential for further losses.
The negative trajectory is reverberating through the entire crypto ecosystem, impacting businesses linked to cryptocurrency trading. Companies like Coinbase, a major U.S. crypto exchange, and Circle, known for its stablecoin issuance, have also experienced share declines. Michael Burry, an investor known for predicting the 2008 financial crisis, issued a grim warning, stating that the current sell-off in bitcoin could spiral into a “death spiral.”
In Washington, Trump’s recent nomination of former Federal Reserve governor Kevin Warsh to lead the Fed has prompted a reevaluation of market dynamics. Although Trump has historically favored low interest rates, Warsh is perceived as someone who may adopt a stricter stance on inflation, leading to expectations that he will be hesitant to lower interest rates swiftly. Higher rates tend to create an environment less conducive to risky investments such as cryptocurrencies.
Treasury Secretary Scott Bessent clarified that the U.S. government lacks the capacity to intervene in the event of a cryptocurrency crash, which dampens expectations of any governmental rescue, particularly from an administration that has previously shown support for crypto innovation.
While there have been advancements in crypto-related legislation aimed at clarifying the regulatory landscape, progress remains slow and uneven. Fundamental legislation, critical to establishing a stable market structure for cryptocurrencies, is still stalled in Congress. As a result, many investors remain wary of committing capital to such a volatile asset class, even with the potential for clearer regulations. According to Louis Navellier, an investment manager, the uncertainty surrounding cryptocurrencies might continue to dissuade investors despite any future regulatory clarity.
