Leading cryptocurrency Bitcoin has lost nearly $ 1.2 trillion in value over the last eight months after reaching an all-time high of $126,080 in October last year. It has wiped out all gains since US President Donald Trump’s second term, despite the leader extending friendly ties and policies toward the broader cryptocurrency and digital-asset market. BTC reached its yearly low of $60,000 last week and is still close to its low of $61,000 on Wednesday.
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Bitcoin: What’s Actually Behind the Downtrend?
The momentum that the cryptocurrency market carried after Trump took office experienced a stark shift. It is now down 30% year-to-date and has also shed nearly 45% of its value in a year. Bitcoin, which the community claimed to be better than the stock market, is eating their words as the S&P 500 index is up 7.70% YTD. So, where did BTC go off track, and what led to its decline? The answer to that came from billionaire entrepreneur Mark Cuban last month.
“I think bitcoin has lost the plot,” Mark Cuban, the Shark Tank investor, said. “It’s not the hedge that I expected it to be, and that was really disappointing,” he exclaimed. The billionaire also confirmed that he sold most of his cryptocurrency holdings, including Bitcoin. This is a complete U-turn from him, where he previously praised BTC, cryptocurrency, and even the NFT market. He was among the biggest cheerleaders of the sector, and reversed course lately.
The influx of speculative money is the reason why BTC and the larger cryptocurrency market suffer, explained Jonathan Bier, CEO of Farside Investors. “A lot of speculative money may be selling Bitcoin and chasing AI,” he said. He also explained that uncertainty about inflation and the Fed’s path on interest rates is leading the shift. Add to that, the jobs data are also making traders worried about the economy.
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