Bitcoin has seen a drop towards $60,000 this week as investors reevaluate its value, and the mood in the crypto market feels quite bleak. There’s no single reason behind this downturn, but, clearly, panic is setting in.
Anthony Scaramucci, who leads the alternative investment firm Skybridge, commented that, “There’s nothing in the market that would justify such a crash.” He noted that people are mainly feeling fear and questioning if Bitcoin is done.
On Thursday, Bitcoin plummeted to $60,062—its lowest since October 11, 2024, which is more than 52% less than its peak of $126,000 recorded in early October 2025.
This past session was particularly dramatic, with the cryptocurrency losing over 15% in just one day. The daily relative strength index dropped to 18, reflecting extreme overselling. Other cryptocurrencies like ether and Solana also suffered significant losses, down 24% and 26%, respectively, indicating broader investor unease in the crypto space.
Bitcoin may recover, but the losses are significant
Bitcoin made a slight recovery on Friday, trading at $69,631.97, up more than 9% from the previous day.
Yet, the recent currency devaluations have prompted many to rethink the role of digital currencies, including how effective they are as stores of value. Institutional demand appears to be declining, with notable outflows from Spot Bitcoin ETFs threatening further declines in Bitcoin’s value.
“This situation is notably different from past bear markets, not stemming from any structural issues,” said Jasper Demere, a desk strategist at Wintermute. He believes it’s more about broader economic shifts rather than inherent failures in the crypto world.
Bitcoin price in the past year
Investors are increasingly doubtful about Bitcoin’s potential to serve as a “digital gold” alternative, especially when compared to traditional safe havens like gold. Over the past year, Bitcoin has dropped 28%, while gold has climbed 72%, highlighting its effectiveness as a hedge against macroeconomic uncertainties.
Amid ongoing geopolitical issues, Bitcoin has often declined alongside other riskier assets, igniting discussions about its role as a safe haven. For instance, not long after a significant tariff announcement on April 2, 2025, Bitcoin dipped roughly 10% below $80,000 while the S&P 500 also fell by about 4%.
Additionally, the commitment from financial institutions and governments to adopt Bitcoin is being questioned—this was a major factor in the token’s rise in recent years.
A recent Deutsche Bank analysis pointed out that Bitcoin’s liquidity is decreasing as investors prepare for more price drops, leading to significant outflows from the market.
These withdrawals have also affected spot Bitcoin ETFs, with over $3 billion exiting these funds in January, following a loss of approximately $7 billion in two previous months.
As for investment strategies, those looking to emulate Bitcoin’s success have halted or delayed purchases in light of the market’s current downturn.
Moreover, traders acknowledge that efforts to establish Bitcoin as a fiat currency alternative have largely stalled. Ryan Rasmussen from Bitwise mentioned that while there has been some interest in businesses accepting Bitcoin, like Steak ‘n Shake and Compass Coffee, the momentum toward using Bitcoin for payments is fading, especially with the growing interest in stablecoins linked to the dollar.
“Wall Street is shifting toward stablecoins, which fundamentally changes payment systems. Bitcoin has morphed into just another asset rather than fulfilling its initial purpose,” Rasmussen stated, revealing his personal stance: he’s never used Bitcoin for everyday transactions and doesn’t intend to.
Beyond these immediate market challenges, there’s a growing concern about the vulnerability of Bitcoin’s underlying network to hacking, which could potentially lead to drastic losses. “This risk is getting more attention as worries escalate,” Rasmussen noted, suggesting that some of this apprehension is already considered in Bitcoin’s pricing.
Even though belief in Bitcoin remains strong among some long-term investors, enthusiasm has significantly diminished overall, causing the price to fall. Scaramucci remains optimistic, asserting he still supports Bitcoin, even after this week’s downturn. “I think the long-term narrative holds,” he remarked, “but I don’t predict the future… who really knows?”
