Bitcoin’s value has officially halved from its October zenith. As the “digital gold” theory falters, investors are turning to physical assets, leaving the cryptocurrency market in a deep winter. From President Trump’s geopolitical threats to the rise of AI-driven market fear, the world’s most famous coin has plummeted below $63,000 for the first time in 16 months. WATCH the breakdown of the record collapse and the historical data suggesting a path to recovery.
Seriously though: what is occurring with bitcoin? Bitcoin has plummeted 44% from its zenith last autumn. Bitcoin is behaving erratically. The globe’s most renowned cryptocurrency has currently surrendered half its worth from its October high, dropping under $63,000 Thursday for the inaugural time in 16 months. That contraction is essentially not atypical at all. Crypto is famously unstable, and it has endured various collapses that are more significant than this current one.
What is peculiar is this: Bitcoin’s four-month downturn has arrived at a moment when, in principle, it had everything in its favor. Crypto proponents have long suggested that investors regard bitcoin as “digital gold,” a fresh safe haven asset where participants can park capital when conditions are difficult. Thus, now would be a sensible period for a safe haven to rally. Geopolitics have turned volatile this year: President Donald Trump is threatening to strike Iran after the United States ousted the leader of Venezuela. The US president has lately been targeting allies in Europe and Canada regarding Greenland, and he’s threatening increased tariffs on South Korea.
Meanwhile, major AI breakthroughs are giving equity market investors the jitters. Anthropic’s Claude can now complete duties for law firms, causing software equities to crash. Fear indicators are signaling danger. CNN’s Fear and Greed Index is firmly in “fear” territory, and the VIX volatility index was briefly at its highest level since November, when the market experienced a minor correction over perplexing post-shutdown economic data and Nvidia earnings. (It was a more straightforward era.) That anxiety has fueled a record surge in gold prices, which recently surpassed $5,500 a troy ounce. Gold remains the ultimate safe haven: a relatively scarce and physical asset that preserves value—and is capable of being literally concealed under a mattress if the worst should happen.
But bitcoin is not following suit. It has shed 20% this year despite all the volatility. In fact, Michael Burry, (the “Big Short” investor), recently noted on his Substack that he suspects gold and silver’s intense volatility in recent days is because bitcoin advocates are offloading their metal holdings to save face from crypto’s decline. Bitcoin’s collapse means it surrendered its entire “Trump bump.” Crypto participants celebrated Trump’s win in November 2024, sending bitcoin and other digital assets climbing, after Trump embraced the digital holdings he once rejected, and instead vowed to eliminate regulations that he claimed were restricting crypto.
So what is driving this new crypto winter? Primarily skepticism that bitcoin is “digital gold,” after all. Bitcoin has been caught up in all the “risk-off” sentiment moving through the market. Rather than providing investors a reason to purchase, traders are viewing that anxiety as a reason to sell. The persistent gap between gold (up 24% since October) and bitcoin (down 50%) has only reinforced that belief.
Treasury Secretary Scott Bessent didn’t assist the situation Wednesday, when he stated before the House Financial Services Committee that the Treasury possesses no power to stabilize crypto markets. Bitcoin ETFs also haven’t surged quite the way that crypto bulls had anticipated, and institutional funding in bitcoin has dropped in recent months, lowering trade volumes. That has intensified knee-jerk responses from retail traders. But there may be a glimmer of hope for bitcoin investors. This crash is not a novel trend—we have witnessed this before.
Bitcoin drops 13%, breaking below $64,000 as sell-off intensifies, doubts about crypto grow
In 2014, crypto valuations shattered after crypto exchange Mt. Gox was compromised. The largest downturn occurred in 2018, when bitcoin fell 74%, driven by concern that the surge of initial coin offerings was excessive. And crypto experienced consecutive crashes in 2021 and 2022, after regulatory heat and the FTX scandal ruined confidence. Each time, bitcoin has recovered entirely within a year and a half.
