Bitcoin continued its downward slide on Thursday, hitting its lowest levels since November, with the cryptocurrency trading as low as $92,500. This marks a stark reversal for Bitcoin, which reached record highs following President-elect Donald Trump’s victory in early November. The digital asset broke the $100,000 barrier in December and climbed to $108,000 before its recent retreat.
The surge in Bitcoin prices had also driven up crypto-related stocks. Companies like MicroStrategy (MSTR), a major Bitcoin holder, saw a 12.7% drop in share prices this week after an initial surge on Monday. Similarly, Coinbase shares fell 9.6% over the same period, reflecting Bitcoin’s decline.
Trump’s presidency has been viewed as favorable for the cryptocurrency sector, which faced stringent regulations under the Biden administration. During his tenure, SEC Chairman Gary Gensler implemented measures aimed at combating fraud in the crypto market. However, Gensler announced in November his intention to step down this month.
The incoming president has pledged to overhaul the regulatory environment for cryptocurrencies. In December, Trump named Paul Atkins, a crypto-friendly figure, as his pick to lead the SEC, replacing Gensler. Additionally, Trump has promised to create a new White House role for a “crypto czar” to oversee Bitcoin policy, appointing former PayPal CEO David Sacks to the position.
Despite these developments, experts caution against expecting immediate changes. Anthony Scaramucci, a crypto investor and former Trump administration official, urged restraint, saying, “I would just caution people, if you think on January 20 a switch is going to flip and everything’s going to be better and roses for bitcoin and the digital asset community, it’s just not how Washington works,” in a December interview with Yahoo Finance.
The current market dip has divided opinions among analysts. Enthusiasts remain optimistic, viewing the recent rally as a precursor to sustained growth. However, skeptics warn of potential volatility, drawing parallels to the dramatic crash of 2022.
Bitcoin’s recent decline, which began on Monday, coincides with mounting inflation concerns following the release of U.S. economic data. Investor withdrawals from U.S. bitcoin exchange-traded funds reached $580 million on Wednesday, underscoring a cautious market sentiment.
As the January 20 inauguration approaches, Bitcoin’s rally appears to have lost momentum, reflecting broader uncertainty about the cryptocurrency’s trajectory under the incoming administration. Whether Trump’s crypto-friendly policies will reignite the sector remains to be seen.
