The price of cryptocurrencies represented by Bitcoin has recently experienced significant fluctuations. Over the past week, Bitcoin's price first fell below $80,000, essentially offsetting most of the gains since the U.S. election last November, and then surged due to news that U.S. President Trump intends to include various cryptocurrencies in the reserves.
Market participants believe that, compared to traditional financial assets, cryptocurrencies face issues such as poor liquidity, high market speculation, and an incomplete market mechanism, making prices more susceptible to dramatic rises and falls. Over the past few months, the direction of U.S. cryptocurrency-related policies has shown significant fluctuations, further intensifying the volatility of cryptocurrencies, especially Bitcoin.
From March to October last year, Bitcoin's price basically consolidated between $50,000 and $70,000. After the U.S. election results were announced, the market's expectations for U.S. cryptocurrency policies significantly strengthened, driving Bitcoin's price to soar and surpass $100,000.
Like other market driving factors, when market pricing fully reflects investor expectations, asset prices often face adjustment pressure. Since February of this year, market optimism has noticeably cooled, and cryptocurrency prices began to decline, accelerating downwards in late February. Bitcoin's price fell sharply from nearly $100,000 on February 21 to below $80,000 on February 27.
Analysts believe that the apparent downturn in the cryptocurrency market is related to a dramatic shift in market risk appetite. On one hand, the cryptocurrency exchange Bybit was recently hacked, resulting in the theft of $1.5 billion worth of Ethereum, which undermined investor confidence. On the other hand, concerns over expectations for U.S. macro policies have deepened, with investors believing that the new government's tariff policies are bringing greater uncertainty to the U.S. economy, leading to declines in global capital markets.
On the 2nd, Trump posted on social media that he would promote the establishment of a cryptocurrency reserve that includes Bitcoin, Ethereum, Ripple, Cardano, and others. This news stimulated a significant rebound in cryptocurrency prices. Data released by the U.S. cryptocurrency exchange 'Bitcoin Base' showed that Bitcoin's price quickly rose above $95,000 during the day, with Cardano, Ripple, and Ethereum increasing by 59.61%, 23.73%, and 9.57% respectively over 24 hours.
(The Wall Street Journal) reported that details regarding Trump's promotion of cryptocurrency reserves remain unknown. If expectations do not align with reality, the market may fall again. Additionally, macroeconomic concerns related to trade policies and other factors remain unresolved, continuing to weigh down the prospects for cryptocurrency trends.
The Chief Strategy Officer of the American Mercury Digital Financial Technology Company, Dai Zhongkai, stated that if the U.S. cryptocurrency reserves do not include specific purchasing requirements, market enthusiasm may quickly fade.
