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The Drop In Cryptocurrencies Intensifies With Bitcoin Below US$ 64 Thousand, After Losing Almost Half Its Value Since The Peak In October 2024, As Investors Reduce Exposure To Risk Assets, Expand Losses In ETFs And Reallocate Resources To Gold, Government Bonds And Traditional Markets
The drop in cryptocurrencies intensified on Thursday, with Bitcoin falling more than 12% to below US$ 64,000, expanding losses since October 2024, when it surpassed US$ 125,000, and highlighting the flight of investors from risk assets.
Drop In Cryptocurrencies And Reversal After Historical Highs
The drop in cryptocurrencies gained momentum after the largest digital currency in the world fell to levels not seen since October 2024. The movement marked a sharp reversal compared to the end of last year, when Bitcoin reached records above US$ 125,000 per unit.
In the four months following the peak, Bitcoin lost nearly half of its value. Since October 6, the accumulated loss exceeds US$ 1.2 trillion in market value, according to data from CoinMarketCap.
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In Dubai, rising tensions from the war in the Middle East are causing super-rich individuals to leave the Gulf and direct their fortunes to a new financial refuge in Asia.
Divergence Between Bitcoin And Gold Widens Pressure
The sale of cryptocurrencies occurs in parallel with the migration to assets considered a safe haven. Since Bitcoin’s peak in October, the performance gap compared to gold has grown significantly.
On Thursday afternoon, Bitcoin had fallen 35% since February 2025, while gold was up nearly 70%. Just this year, gold has risen over 11%, while Bitcoin has dropped more than 26%.
Cascade Effect In The Crypto Ecosystem
The pullback of Bitcoin raises additional concerns for the rest of the sector. The currency is often described as “digital gold,” for its supposed ability to preserve value during periods of uncertainty, a analogy that has been tested by the recent correction.
Flows into Bitcoin ETFs have decreased drastically with the price drop. These funds had driven the appreciation observed last year.
Bitcoin has fallen below the average entry price of many investors in spot ETFs in the United States, estimated at around US$ 81,600. The correction, therefore, directly affects recent positions in the market.
Impact On Companies Exposed To Bitcoin
The downturn also pressures companies that increased exposure to the asset during the rise. Strategy’s shares fell more than 17% on Thursday, following Bitcoin’s decline.
The company holds over 713,000 coins, acquired at an average price of approximately US$ 76,000 per unit, according to its latest regulatory filing. With the price below that level, investors are showing apprehension about further losses.
This pressure extends to other companies linked to cryptocurrency trading. Shares of Coinbase, Circle, and Robinhood also fell on Thursday.
Risk Assessments And Market Alerts
The recent movement has reignited alerts about adverse scenarios. Michael Burry stated that “scary scenarios are now within reach,” referring to the intensity of Bitcoin’s correction.
In a post on Substack, he warned that the price drop could evolve into a “death spiral.” The assessment reflects the fear of additional chain sales in the sector.
Washington Vibrations And Monetary Policy
Political and monetary factors have also influenced the repricing of assets. Kevin Warsh’s nomination by Donald Trump for the presidency of the Federal Reserve contributed to a redefinition in the markets.
Despite Trump’s statements favoring lower interest rates, Warsh is viewed as someone with a history of being more stringent in combating inflation. Markets assess that rate cuts would not occur quickly.
Higher interest rates and lower liquidity often complicate the sustainability of high-risk bets, such as cryptocurrencies. This environment increases pressure on already weakened prices.
Dollar, Geopolitical Tensions And Seeking Safety
With the exit of investors from the crypto market, traditional assets gained ground. U.S. Treasury securities, European and Asian stocks, as well as precious metals like silver and gold, have begun to concentrate flows.
The U.S. dollar is also facing pressure, reflecting investor caution amid trade and tariff threats from the Trump administration, as well as uncertainties related to tensions with allies and recent geopolitical events.
Limits Of Government Support For Cryptocurrencies
In Washington, Treasury Secretary Scott Bessent stated that the U.S. government lacks the power to intervene and sustain cryptocurrencies in the event of a collapse.
The statement reduced expectations of any type of bailout, even under an administration perceived as broadly favorable to the sector. The declaration reinforced the perception of risk among investors.
Advances And Regulatory Impasses
Despite positive signals from the White House, the sector faces challenges in obtaining clear rules in Congress. Citi analysts pointed out that legislative progress has been slow and uneven.
In recent months, lawmakers have advanced projects to clarify the regulation of digital assets and the oversight of stablecoins. However, broader rules regarding market structure remain stalled.
These rules are viewed as crucial for enhancing the sector’s safety. The lack of definitions keeps some investors hesitant, even in the face of the possibility of future advancements.
Persistence Of Pessimism Among Investors
Some managers maintain a cautious view on Bitcoin. Louis Navellier assessed that even with greater regulatory clarity, investors may hesitate given the volatility of the asset class.
The combination of sharp correction, political uncertainties, high interest rates, and lack of institutional guarantees sustains the pessimism observed in the market. The drop in cryptocurrencies continues to be one of the main signals of risk aversion in the current scenario.
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