In the first half of the year, the industry was tumultuous, market sentiment fluctuated wildly, and hot events emerged one after another. At the beginning of the year, Trump was elected president, and the favorable news for the cryptocurrency sector promised at the start of the election acted like a strong stimulant, hitting retail investors directly. As a result, the price of BTC quickly climbed, temporarily breaking the $100,000 barrier, and the entire market was filled with expectations, as if a new bull market had indeed arrived.
At the same time, a series of related concept coins, such as TRUMP, also emerged, sparking a wave of speculative frenzy. Among them, TRUMP's initial price was only $0.1824 but surged to $73.43 in a short period, a staggering increase of over 40,158%. Retail investors completely lost themselves, frantically chasing highs and embarking on a path of extreme greed.
However, the good times were short-lived. In February, the price of BTC plummeted, breaking through the psychological barrier of $100,000. On February 2, the daily decline exceeded 2%, hitting a low of $99,678, directly breaching the technical support level formed at the end of January. This crash was like knocking over a domino, causing ETH, DOGE, and a host of altcoins to collectively follow suit, with even more astonishing declines: ETH fell 6%, and DOGE fell 8%, resulting in a dismal scene.
But the drop in February was not enough to crush retail investors' confidence. The trade war that erupted in April was the last straw that broke the camel's back. This sudden storm completely disrupted the fragile balance in the cryptocurrency sector, and market panic spread rapidly like wildfire. Under the uncertainty of tariff policies, the value of retail investors' assets evaporated quickly, and the last remaining hope and expectations were completely shattered, causing their psychological defenses to collapse.
On April 7, ETH's price fell by 8.65%, dropping to as low as $74,500, with ETH's decline being even more rapid, at one point reaching a 17% drop, hitting a low of $1,420. SOL, XRP, DOGE, and others were not spared, suffering collective heavy losses of nearly 20%. Massive liquidations continued to unfold, and by 4:05 PM that day, 446,500 people had been liquidated globally in the past 24 hours, with the total liquidation amount reaching $1.381 billion. The industry term 'no panic in spot' also began to waver at this moment.
As the tariff farce gradually eased, on April 25, the price of BTC once again broke the $95,000 barrier, reaching a new high since February 25. Market confidence seemed to recover somewhat. However, overall, the severe fluctuations in the market in the first half of the year did not change prices much, while retail investors suffered heavy losses.
Looking back at the first half of the year, more than 90% of people in the industry suffered losses, and the reasons are multifaceted.
From the market environment perspective, the cryptocurrency sector itself possesses extremely high volatility and uncertainty. Prices of mainstream cryptocurrencies like BTC fluctuate frequently and significantly, making it difficult for retail investors to grasp the right timing for buying and selling. In just a few months, BTC's price dropped sharply from a high, then suddenly rebounded during certain periods. This roller-coaster market is hard to predict even for seasoned investors. Many altcoins and newly issued concepts lack actual value support, and their prices are completely swayed by market sentiment and speculation, falling into the trap of chasing highs and selling lows.
A series of policies implemented by Trump triggered extreme instability in the global financial markets, leading to a decline in risk appetite and large-scale sell-offs of risk assets, including cryptocurrencies. Regulatory policies regarding cryptocurrencies in various countries are also constantly changing, creating uncertainty that makes retail investors wary and hesitant to enter the market on a large scale or hold long-term. The long-term pressure of regulatory scrutiny cannot be ignored, as the global unified cryptocurrency taxation framework set to launch in June 2025 forces some investors to close positions to avoid taxes; the U.S. Treasury's requirement for exchanges to report transactions over $100,000 undermines the anonymity advantage of cryptocurrencies, leading to capital outflows.
The backlash after the market overheated is also inevitable. In the early part of the year, during the significant rise in BTC prices, retail investor funds surged, accounting for 62%, and the number of open contracts on exchanges reached a historical high. A large number of 'leveraged long positions' gathered around the $100,000 mark, and once the market became overly euphoric, any slight price fluctuation triggered panic selling and stampede events. Additionally, the sell-off actions of some whales intensified market panic, leading to suspicions and follow-up selling.
In the second half of the year, uncertainty continues to loom. On the positive side, as the global economic situation gradually clarifies, risk appetite may rebound. If countries can reach a relatively unified and clear policy framework regarding cryptocurrency regulation, it will help stabilize market confidence and attract more off-market funds. Institutional interest in cryptocurrencies is also on the rise, with asset management giants like BlackRock making moves that will bring new vitality and capital to the market.
However, risks still exist. The pace of global economic recovery is uncertain, and if the economy falls into recession again or experiences a significant black swan event, the cryptocurrency sector, as a risk asset market, will inevitably be impacted. Regulatory policies may still change, and if regulation tightens, the market could fall into a slump again. Manipulation and fraud within the cryptocurrency market remain rampant, with various projects lacking actual value support emerging continuously, leading to overly dispersed market positions, where retail investors may suffer losses with the slightest misstep.
BTC's development in recent years has been positive, and buying it doesn't come with worries, but various worthless altcoins in the sector require extreme caution when entering. Looking back at this year, time has passed, and BTC's price remains unchanged from the beginning of the year, while the chips in everyone's accounts have dwindled. The drop of BTC influenced by various factors can be recovered by buying, as BTC has been accepted by most institutions, but others have no value support at all!
But at this point, we can only look forward.
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