The crypto downturn has occurred against a backdrop of widening losses across high-growth tech stocks and other risk assets
Getty Images / Ian Maule
Bitcoin plunged below $64,000 on Thursday for the first time since 2024, wiping out all the gains it accrued after President Donald Trump’s election victory. Plunging prices, part of a wider sell-off across crypto and tech assets, have erased trillions of dollars of market value and reignited debate over the cryptocurrency’s resilience and role in investors’ portfolios.
The cryptocurrency dropped almost 13%, marking its largest single-day decline in years as leveraged traders were forced to liquidate positions amid a broader de-risking in markets. Ether, the second-largest token, has suffered even larger percentage losses.
While Bitcoin rebound slightly Friday morning, hovering around $67,000, the retreat has nonetheless erased about half of its value since its all-time peak above $126,000 in late 2025, when optimism around pro-crypto policies and institutional adoption was at its height. But now, industry skeptics are reviving their view that even supporters’ policy wins have not translated into durable price support.
The crypto downturn has occurred against a backdrop of widening losses across high-growth tech stocks and other risk assets. The S&P 500 and Nasdaq $NDAQ both extended their slide this week, driven by renewed investor concerns about valuations and slowing earnings growth — especially in sectors tied to artificial intelligence spending. This broader equity weakness has tended to drag on crypto, which often trades more like a risk asset than a “safe haven.”
Liquidations of more than $1 billion in Bitcoin positions have piled pressure on prices, Reuters reports, while the crypto market has shed roughly $2 trillion in value since its October peak. Analysts point to a combination of stock market volatility and weakening sentiment as ownership of both cryptocurrencies and tech equities becomes less attractive.
Several market watchers also highlight that exchange-traded outflows — particularly from U.S. spot bitcoin funds — have picked up as investors manage risk and rebalance toward traditional assets. Such outflows reduce the market’s liquidity cushion and leave crypto more vulnerable to sharp moves. .
Amplifying the sell-off is the absence of aggressive institutional “dip buying,” leaving prices to trade on largely retail sentiment and speculative flows Some commentators describe the current phase as “full capitulation mode,” where holders, including large investors or “whales,” are surrendering positions rather than stepping in to defend them.
Rather than a short-term correction, the retreat, which began in October, has evolved into a full-blown "crypto winter," a term for "a particularly painful type of bear market when prices drop for months on end and confidence in the entire asset class seems to evaporate," according by the Motley Fool.
IG analysts predict that Bitcoin's plunge may continue, with prices nearing $56,000.
"Sickening scenarios have now come within reach," Michael Burry, "The Big Short" investor, wrote in a Substack post last week, outlining various consequences of the sell-off continuing. Among them: an "existential crisis" for Strategy, one of the largest corporate holders of Bitcoin, if the coin dips below $60,000. The firm would lose more $4 billion, he wrote, and would "find capital markets essentially closed."
Yesterday, Strategy reported a $12.4 billion loss in the last quarter of 2025, as falling crypto prices erode the value of its reserve, while its stock has slumped sharply.
Crypto exchange Gemini also announced layoffs Thursday, and a strategic pullback in operations amid depressed trading volumes and an 80% slide in its share price since listing.
Prediction markets like Kalshi and Polymarket show rising odds that bitcoin may test much lower thresholds later this year, reflecting market expectations that pressure may persist before any recovery takes hold.
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