Bitcoin Dropped Nearly 30% This Week. But Why?

Source: Slashdot

Recent Price Movement

• Last Sunday Bitcoin fell 13% in three days, reaching $76,790【source】.
• By Thursday it had dropped another 21% to $60,062.
• This morning the price is $69,549, up from Thursday but still 44% below its all‑time high of $123,742 in October.

In total, Bitcoin is down almost 30% this week, according to CNBC.

Analyst Commentary

“This steady selling, in our view, signals that traditional investors are losing interest, and overall pessimism about crypto is growing.” – Marion Laboure, Deutsche Bank analyst (Wednesday)

• Investor caution is growing as many sensationalized claims about Bitcoin have not materialized.
• Bitcoin’s price has largely moved in tandem with other risk‑on assets such as equities, while its adoption as a payment method remains minimal.
• Institutional investors, previously seen as price supporters, appear to be selling. “Institutional demand has reversed materially,” reported CryptoQuant on Wednesday.

Alternative Perspectives

The Wall Street Journal highlighted uncertainty among crypto “permabulls” about the cause of the crash【source】:

• Prominent figures like Michael Novogratz (Galaxy Digital) noted there is “no smoking gun.”
• Anthony Scaramucci (SkyBridge Capital) remarked, “If you ask five experts, you’ll get five explanations.”

CNN’s headline, “No, but seriously: What’s going on with Bitcoin?”, reflects the broader confusion, opening with “Bitcoin is acting weird…”.

Broader Context

• Bitcoin’s four‑month slump occurs despite a theoretically favorable environment.
• Economist Paul Krugman points out that Bitcoin’s price is now lower than it was before the 2024 U.S. election, when former candidate Donald Trump pledged to make cryptocurrency “one of the greatest industries on earth”【source】.
• Both CNN and CNBC suggest the new “crypto winter” is driven largely by doubts that Bitcoin can serve as “digital gold.”

Thanks to Slashdot reader fjo3 for sharing the news.