The vast majority of the cryptocurrency market is flat on its face, and Bitcoin, the industry’s leader that has overcome years of skepticism and proven its recovery abilities time and again, has lost $20,000 in its price in the last month.
BTC prices have been struggling since earlier this month, but dramatic plunges were more prominent in recent days as various factors—from geopolitical woes to trade wars—beat down financial markets and in turn, affected crypto.
Bitcoin’s Dramatic Plunge from ATH
It was during the inauguration of U.S. President Donald Trump on Jan. 20 when Bitcoin hit its all-time high above $108,700 amid high hopes that the new administration will be much kinder to the crypto industry than its predecessor.
Ahead of inauguration, BTC already logged successive new all-time highs (ATH) until it settled for the Inauguration Day ATH.
As things started to unravel with the new government and Trump reawakened his trade wars with several countries, Bitcoin’s price started to slow down, as per data from CoinGecko.
By Feb. 20, exactly a month after hitting its ATH, Bitcoin was down to $95,000 and by Monday, the world’s largest cryptocurrency by market cap made it clear it was on a path further down.
As of early Wednesday, BTC is trading at around $88,000, some $20,000 down from its all-time high over a month ago.
Why is Crypto Down?
Some analysts have said the reactions of the broader financial market to Trump’s tariffs, geopolitical tensions over Ukraine, and other political woes in the U.S., but others in the crypto space have different takes on the matter.
- Fear – CoinRoutes co-CEO Dave Weisberger said markets really “don’t need a reason when fear takes over,” referring to increasing fears among crypto investors being affected by the downturn, resulting in sell-offs.
- Memecoin woes – Aside from FUD (fear, uncertainty, and doubt) reaching intense levels across the crypto community, there’s also the recent woes that investors have suffered following multiple meme coin “rug pull” incidents, Weisberger pointed out.
- Developer slowdown – For The Block EIC Tim Copeland, the downtrend in crypto prices is because “developer productivity [is] set to go to zero,” indicating that blockchain and crypto developers’ activity has gone sluggish. Copeland could be right, considering the apparent reduction in major project announcements in recent weeks among blockchain and crypto firms.
- Just a regular downturn – For crypto defense lawyer Carlo D’Angelo, the red wave blanketing the crypto market is “part of the bigger cycle” in the industry and a dip “isn’t a sign of collapse.”
D’Angelo isn’t completely wrong or right. Crypto has suffered similar massive red days over the past decade, including the “crypto winter” after the collapse of crypto exchange FTX late in 2022. On the other hand, it could be safe to say the current market conditions may be prolonged or cut short depending on incoming huge, positive developments on crypto policy and big projects.
It remains to be seen whether crypto will repeat history—plunging hard only to skyrocket to unprecedented highs—and if Bitcoin will see major shifts amid the U.S. Securities and Exchange Commission’s (SEC) recent pivot toward a better crypto regulatory approach.
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