- Bitcoin was worth over $126,000 back in October.
- On Thursday, the digital token was down briefly to just over $60,000.
- Experts say investors are losing interest and growing pessimistic about digital assets.
Even for an asset class known for its volatility, bitcoin and its cryptocurrency brethren are having a rough week.
Bitcoin’s value is down around 28% in the previous four months and has lost over 17% in just the last seven days, according to tracking by Coinbase. In one 24-hour period earlier this week, the digital currency’s price declined by over $10,000, slipping to around $60,000 per token before recovering slightly. As of mid-morning Friday, bitcoin was trading at just over $69,000 per token.
Cryptocurrency advocates have long hoped that digital tokens would earn a reputation as an investment safe haven, much like precious metals, where savvy investors cache assets during times of economic upheaval or uncertainty. Recent global economic conditions have helped drive the cost of gold and other metals into record territory amid widespread fiscal worries.
In a Wednesday note to investors, Deutsche Bank said the latest drop was “triggered by” Trump’s nomination of Kevin Warsh, as the new chair of the Federal Reserve, per a report from BBC News. Some industry watchers believe Warsh will take a more “hawkish” approach on monetary policy, keeping interest rates higher, whereas looser monetary policy tends to support investment in assets such as cryptocurrencies.
Bitcoin prices have been trending down for the last four months, Deutsche noted, and there has been growing negative sentiment around cryptocurrency more broadly.
“This steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing,” Deutsche Bank analysts wrote.
Trump’s shifting stance on digital currencies
Cryptocurrency values have been mostly on the rise since President Donald Trump began his second term thanks to his advocacy for the digital assets. But he hasn’t always been a fan.
In the run-up to the 2024 election, Trump reversed his former stance as a critic of the digital currency market, which he described in one instance as a “scam” during his first term. He later pivoted to being a crypto proponent and made repeated campaign pledges to create a friendly space for the sector.
And since the start of his second term, he’s worked to follow through on those promises with both staffing decisions and administrative changes that have relaxed regulatory oversight. And while crypto values have shown their trademark volatility over the past 12 months, many tokens have also achieved their highest valuations ever over the same period including bitcoin which hit an all-time high of over $126,000 per token last October.
On Friday, cryptocurrency analyst Mark Thielen from 10X Research told CNBC that bitcoin could go as low as $50,000, after a potential small bounce soon.
“I think we are going to have a little counter-trend rally that might go sideways or bounce a little bit,” Thielen said. “But I think during the summer we make another low.”
What is cryptocurrency?
If the world of cryptocurrencies is still seeming rather, er, cryptic, here’s a handy breakdown from Investopedia:
- A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
- Many cryptocurrencies are decentralized networks based on blockchain technology — a distributed ledger enforced by a disparate network of computers.
- A defining feature of cryptocurrencies is that they are generally not issued by any central authority, rendering them theoretically immune to government interference or manipulation.