Bitcoin has slumped to its lowest level since Donald Trump returned to the White House more than a year ago, erasing gains made by the leading digital asset since the pro-crypto president won the election.
The largest cryptocurrency continued its nearly four-month downward trend, falling below $74,424.95 and hitting its lowest price since 2025. This level was last seen on April 7, when Trump’s initial tariff plan disrupted global financial markets.
“Many traders tried to buy the dip, betting that the price of Bitcoin would rebound above $80,000,” said Bohan Jiang, a senior derivatives trader at FalconX. “As the price of Bitcoin has fallen, many of these positions have been closed, putting pressure on the price.”
During Tuesday’s New York trading session, Bitcoin dropped by 7% at one point to $72,877, hitting its lowest level since November 6, 2024. In early Wednesday trading in Asia, the price of Bitcoin rebounded slightly, trading at $75,800. So far this year, Bitcoin has declined by approximately 13% in total.
Despite the White House’s supportive stance on cryptocurrencies and the increasing adoption by institutional users, the price of Bitcoin has plunged by approximately 40% since hitting a record high in early October. This sharp decline was triggered by a large-scale liquidation on October 10th, which was set off by further remarks from Trump on tariffs, wiping out $19 billion worth of leveraged token bets. The entire cryptocurrency market has yet to recover from this setback.
According to data from the Chicago Mercantile Exchange (CME) and Coinglass, the open interest of cryptocurrency futures contracts, or the number of outstanding contracts, dropped significantly over the weekend. The funding rate of perpetual contracts, which account for the majority of digital asset trading volume, has turned negative, indicating an increase in demand for bearish bets.
The price of put options (contracts used to guard against downside risks) has declined somewhat, but the concentration of strike prices indicates that the market has not yet shaken off its nervousness.
“The sentiment in the cryptocurrency market has hit rock bottom,” said Augustine Fan, a partner at SignalPlus, a Hong Kong-based crypto options platform. “After a year-long decline, volatility is finally starting to rise as traders sought safe havens and the market remained in a bearish mode.”
However, since the sell-off in October, the market has been under continuous downward pressure. Although Bitcoin briefly rebounded by nearly 7% during the Thanksgiving week, market sentiment deteriorated again in December.
Investor concerns remain high, influenced by economic headwinds and persistent worries about the AI bubble.
Although some institutional investors remain committed, the participation of retail investors has declined as major long-term holders of Bitcoin have sold off billions of dollars worth of the cryptocurrency.
The MarketVector Digital Assets 100 Small Cap Index, which tracks the 50 smallest market capitalization digital assets among 100, has also plunged by nearly 70% over the past year. Since the two largest cryptocurrencies, Bitcoin and Ethereum, were approved for listing on US exchange-traded products (ETFs), so-called “altcoins” have underperformed them, attracting a large amount of institutional funds. However, the spot ETFs of these assets – a significant portion of which are held by retail investors – suffered outflows of billions of dollars in November.
“Bitcoin’s trading pattern still resembles that of a high-beta risk asset rather than digital gold,” said Morten Christensen, a trader who runs AirdropAlert.com. “This doesn’t mean the Bitcoin theory has failed – it just indicates that it hasn’t yet achieved the expected results.”
