The price of Bitcoin continued its prolonged decline on Thursday, plummeting by an additional 11% to reach $67,000, marking a significant drop from its previous highs. This latest figure reflects a valuation lower than it was at the time of President Donald Trump’s re-election in November 2024.
Bitcoin, often referred to as “digital gold,” has experienced a staggering loss of nearly 50% since reaching a record high of $126,210.50 on October 6. By 2 p.m. ET on Thursday, the cryptocurrency was trading at approximately $66,301.
Following Trump’s election, Bitcoin saw a substantial rise over the following year, spurred by hopes of a more favorable regulatory environment under his administration. However, that upward momentum has now been fully reversed, with the recent sell-off being attributed to a shift in investor sentiment. Market participants are increasingly pulling money out of speculative assets such as gold, silver, and cryptocurrencies, amidst growing concerns over future regulatory frameworks.
In a significant development, the White House convened a meeting this week with banking executives and cryptocurrency companies to explore potential consensus on forthcoming legislation aimed at regulating stablecoins. The cryptocurrency sector is advocating for the ability to provide customers with earning opportunities through crypto deposits, a proposition that banks strongly oppose due to fears that it could siphon funds from the traditional banking ecosystem. Despite ongoing discussions, it appears current legislative efforts may stall in Congress.
Amid these developments, investors have leaned towards spot Bitcoin ETFs (exchange-traded funds) as a way to engage with Bitcoin indirectly. Yet, data from Morningstar Direct indicates that approximately $5.7 billion was withdrawn from these ETFs between November and January.
The broader market has been affected as well, with firms involved in cryptocurrency trading facing significant downturns. Coinbase Global saw a decline of 9.1%, while online trading platform Robinhood Markets dropped 8.1%. Bitcoin mining company Riot Platforms reported a 10% decrease, and Strategy, known for its Bitcoin investments, fell by 13%. Strategy holds a significant Bitcoin portfolio amounting to 713,502 coins, acquired at an average price of over $76,000, leading to a diminished asset value that puts it underwater on its investments.
American Bitcoin, a venture linked to Trump’s sons Eric and Donald Trump Jr., has also seen its value decrease, down 6.6% and plummeting more than 80% since October 7. Other Trump-associated cryptocurrency enterprises have not escaped the downturn either. The market valuation of World Liberty Financial token ($WLFI) has dropped to around $3.25 billion, down from over $6 billion in mid-September. Additionally, the price of a meme coin associated with Trump, $TRUMP, now stands at $3.93, significantly lower than the $45 it reached shortly before his inauguration in January.
The current landscape represents a challenging time for the cryptocurrency market, with both regulatory uncertainties and shifting investor appetites driving significant volatility.
