Bitcoin has already lost 25% of its historical high
28 February 2025 16:15
Bitcoin’s collapse deepened on Friday, as investors moved to safer assets following US President Donald Trump’s latest threats of new tariffs. This is reported by "Komersant Ukrainian" with reference to Bloomberg.
Cryptocurrencies plunged 7.2% on Friday to their lowest level since early November and lost about 27% of their all-time high reached less than six weeks ago. The sell-off came amid a broad-based collapse in cryptocurrencies, with Ethereum, Polkadot and XRP falling by more than 7% on Friday.
“The last time we saw such sentiment was in 2022. This collapse can be seen as a reaction to macroeconomic concerns about Trump’s tariffs and geopolitical uncertainty,”
– Caroline Bowler, CEO of BTC Markets Pty Ltd, said, referring to the “crypto winter” when prices plummeted due to rising interest rates and industry concerns.
Trump said on Thursday that 25% tariffs on goods from Canada and Mexico will take effect on March 4, dashing hopes that he might reverse course after an earlier delay. He also said that Chinese imports would face an additional 10% duty, prompting officials in Beijing to promise “all necessary measures” in response.
The focus on trade tensions led to a broad decline in risky assets across markets on Friday, sending almost all Asian stock markets lower and exacerbating the decline in European futures. But cryptocurrencies suffered the most.
Bitcoin has now fallen by more than 20% in February. If the decline continues until the end of Friday, it will be the largest monthly drop since June 2022.
Problems with “Trump bets”
The selloff underscores the rapid reversal of what used to be one of the most popular “Trump bets” in global markets: buying Bitcoin with the expectation that the president’s cryptocurrency-friendly approach would lead to a broad rally.
It worked for a while. Bitcoin hit its all-time high of $109,241 on January 20, the day of Trump’s inauguration. But cryptocurrencies have recently come under pressure due to concerns that Trump’s aggressive approach to global trade could lead to widespread problems.
“Given the macroeconomic environment, it’s not surprising to see us where we are,”
– said Stefan von Henisch, director of OTC trading in Asia Pacific at cryptocurrency custody firm Bitgo Inc. Traders are still waiting for Trump to propose concrete steps for the sector, including the creation of Bitcoin reserves, he added.
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What Bloomberg strategists say
“The real panic may be yet to come. Bitcoin always has another 70% drop in its future, by design. $72-74 thousand seems to be a technical critical zone that could trigger the next crypto winter,”
– said Mark Cudmore, executive editor of MLIV.
Investors now have to think about how deep the world’s largest cryptocurrency can go. There is support for the coin around $70,000, said Ruslan Lienha, head of markets at crypto platform YouHodler, citing technical analysis. But he said investors shouldn’t assume that Bitcoin’s collapse will be that severe. As of 6:52 a.m. in New York, Bitcoin was down about 4.3% to $80,653.
“We will only see this level if negative sentiment dominates the stock markets,” Lienha said,
– Lienha said.
This week’s bearish sentiment also affected U.S. spot bitcoin ETFs, with investors pulling out more than $1 billion on Tuesday, the largest single-day outflow since their debut last year.
Trump has already made several changes that have pleased cryptocurrency supporters, including appointing cryptocurrency supporters to key positions. The Securities and Exchange Commission (SEC), which launched a years-long campaign against cryptocurrencies under former chairman Gary Gensler, has also closed investigations into several cryptocurrency companies in recent weeks.
Trump has said he wants to make the United States the “cryptocurrency capital of the planet and the world’s Bitcoin superpower.”
Bitcoin
Bitcoin is the world’s first and most popular cryptocurrency, which appeared in 2009. It was created by a person or a group of people under the pseudonym Satoshi Nakamoto, who remain anonymous to this day. Bitcoin is based on blockchain technology and has no centralized governing body.
Bitcoin is “mined” using a special mining technology, which is a digital analogy of mining physical minerals. Similarly to physical minerals, the number of Bitcoins is limited – there are only 21 million tokens. So far, 19 million tokens have been mined, which is more than 90% of all “deposits”. Therefore, mining is becoming more and more difficult and expensive.
Bitcoin, like anything else in the world, can be exchanged for anything else, including traditional currencies. The value of Bitcoin shows the level of trust in it.
Bitcoin is considered a reliable and well-secured currency with a very high level of confidentiality. In the Bitcoin system, all information about transactions is open, but information about owners is completely anonymous. That is why Bitcoin, like some other cryptocurrencies, is popular among Ukrainian corrupt officials.
Initially, Donald Trump called cryptocurrencies a fraud, but during the last election campaign he changed his mind dramatically. Trump talks about maximizing the promotion of cryptocurrencies in the United States and promises to make the US the cryptocurrency capital of the world. The current boom in bitcoin and the cryptocurrency market in general is taking place against the backdrop of these promises.
