Bitcoin Drops Below $90K

Bitcoin rebounded above $65,000 from the two-year low of $60,000 earlier on Friday, as investors took advantage of cheaper prices following the plunge across cryptocurrencies in early February. Bitcoin remained around 30% lower year-to-date, trading at around half the value since its record high four months prior as a deterioration in its narrative was magnified by a selloff in a wide range of speculative assets. The higher share of Bitcoin in institutional portfolios made it more vulnerable to derisking, which recently dominated trades following higher volatility and margin requirements in precious and base metal derivatives. Other portions of the market also tie the decline in cryptocurrency holdings by retail traders on the broader range of substitutes for speculative trading, including leveraged ETFs with exposure to AI companies, zero-day options for equities, and the rise of betting markets.

Bitcoin steadied above $64,000 on Friday after sinking to as low as $60,000 earlier in the session, as traders navigated heightened volatility across financial markets. The leading cryptocurrency has lost about half its value from its October 2025 peak, erasing all gains made since Trump took office and signaled support for the crypto industry. Investor optimism had previously been buoyed by Trump’s direct involvement in the sector and his pledges to ease regulation, priming to make the US the “crypto capital of the world.” The selloff has also spread to other cryptocurrencies, related ETFs and companies that hold massive bitcoin holdings such as Strategy Inc. The latest drop puts long-term bitcoin holders to the test amid mounting doubts about digital assets’ real-world utility. Some analysts argue that bitcoin has been exposed as a largely speculative asset, failing to function as a debasement hedge comparable to gold and other precious metals.

Bitcoin sank to below $70,000 for the first time since October of 2024, marking a 25% plunge since the start of the year, pressured by a selloff in speculative positions across a wide range of asset classes. The aggressive decline was marked by a deterioration in the narrative around cryptocurrencies, breaking against the view of a hedge against inflation and geopolitical stress, and tracking the drop in gold. Additionally, the higher share of Bitcoin in institutional portfolios made it more vulnerable to derisking, which recently dominated trades following higher volatility and margin requirements in precious and base metal derivatives. Other portions of the market also tie the decline in cryptocurrency holdings by retail traders on the broader range of substitutes for speculative trading, including leveraged ETFs with exposure to AI companies, zero-day options for equities, and the rise of betting markets.