Bitcoin, the world’s largest cryptocurrency, continued its downward trend on Thursday, touching its lowest level since November as it traded as low as $92,500.
This decline comes after a period of significant gains following President-elect Donald Trump’s victory in early November, which had fueled a surge in crypto-related assets and stocks.
The recent downturn suggests that the post-election rally may be losing steam as Trump’s inauguration approaches.
Trump’s win initially fueled crypto surge
Bitcoin first crossed above the $100,000 milestone in early December and later exceeded $108,000, driven by optimism that the incoming Trump administration would be more favorable to the crypto industry.
The sector has faced strict scrutiny from the Securities and Exchange Commission (SEC), headed by Gary Gensler, during the Biden administration.
However, with Gensler’s planned departure this month, Trump’s pledge to appoint crypto-friendly Paul Atkins as the new SEC head has further bolstered market expectations.
Trump has also committed to creating a new White House role for a “crypto czar” to oversee bitcoin policy, with former PayPal CEO David Sacks slated to fill the position.
Reality check on immediate policy changes
However, despite the prevailing optimism, some industry figures are urging caution.
Anthony Scaramucci, a crypto investor who worked in Trump’s first administration, warned that investors shouldn’t expect any immediate sweeping changes when Trump takes office.
“I would just caution people, if you think on Jan. 20 a switch is going to flip and everything’s going to be better and roses for bitcoin and the digital asset community, it’s just not how Washington works,” he told Yahoo Finance in December, emphasizing that changes take time.
While enthusiasm remains in certain quarters, skeptics have warned that crypto’s rapid growth over the past year could lead to another crash similar to the one in 2022, as reported by Yahoo Finance.
Bitcoin and crypto-related stocks fall
The recent decline has seen Bitcoin fall by around 6% from its week-ago level, beginning its descent on Monday as US economic data stoked inflation concerns.
According to Bloomberg data, investors withdrew over $580 million from US bitcoin exchange-traded funds on Wednesday, adding to the downward pressure on the cryptocurrency.
Crypto-related stocks have mirrored Bitcoin’s fall, with MicroStrategy, a bitcoin holding company, down 12.7% since Monday, and Coinbase dropping 9.6% over that same time frame.
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