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Crypto Market Shocked As Bitcoin Plummets 28 %
The crypto market has just experienced one of its most violent downturns in months. After reaching a historic high of $109,000 on January 20, Bitcoin plunged by 28 %. This drop wiped out billions of dollars in market capitalization in a matter of weeks. Such a brutal reversal occurs against a backdrop of economic tension and turbulence in the financial markets. But beyond a simple technical correction, several major events contributed to this decline. Among fears of macroeconomic instability, record cyberattacks, and political disillusionments, we look back at the causes of this downfall and its implications.
A crash amplified by external shocks
The volatility of Bitcoin is not surprising, but this time, the drop can be explained by a conjunction of major shocks. In fact, the first trigger factor is based on an unfavorable macroeconomic context. Since Donald Trump’s arrival at the White House, his economic announcements have sown confusion in the markets. In particular, the prospect of new tariffs on international trade has cooled investors. “This retreat can be interpreted as a response to macroeconomic fears related to Trump’s tariffs and geopolitical uncertainty,” explains Caroline Bowler, CEO of BTC Markets. The correction goes beyond Bitcoin. Additionally, the Nasdaq 100 has lost 7 % since its last peak on February 19, illustrating a widespread distrust of risky assets.
A market under pressure and disappointed expectations
The price decline then intensified due to technical market movements. In February, Bitcoin exchange-traded funds (ETFs) recorded a net outflow of $3.3 billion, a negative record since their launch in January 2024. The dynamic is simple: when the price of Bitcoin drops, some investors withdraw their capital from ETFs, which exacerbates selling pressure on the market. Thus, “speculative money that enters Bitcoin also exits quickly when a correction occurs,” analyzes Michael Rosen, investment director at Angeles Investments.