It’s been a brutal stretch for the crypto market, which was flying high as recently as early October. On Thursday, Bitcoin, the original cryptocurrency, hit a low of under $87,000. Its price is down about 14% since last week.
Altcoins like Ethereum and Solana have also been nosediving. The former is down 13% in the past week to its current price of around $3,000, and the latter is down 9% during that time to its current price of $139. Meanwhile, the share price of crypto-focused public companies aren’t faring any better, as Strategy and Circle are down roughly 16% and 20% in the last week, respectively.
This rout comes at a time when many thought 2025 would be a boon for crypto thanks to President Donald Trump’s friendly regulatory stance to the sector. That was true for most of the year, as Bitcoin outpaced the S&P 500. However, since Oct. 6, Bitcoin is down about 31% from its all-time high price of roughly $126,000, compared to the roughly 3% gain of the S&P 500. Much of that is due to crypto’s October flash crash, caution from the Federal Reserve, and the tendency of investors to steer clear of risky assets.
“Markets are essentially flying blind right now, starved of meaningful macro data and stabbing in the dark. That vacuum has triggered broad risk-asset selling,” said James Butterfill, head of research at CoinShares. “A sharp repricing in expectations for a December Fed rate cut has fueled the selloff.”
Crypto’s recent tailspin began on Oct. 10, when traders experienced the largest liquidation event in history, according to the analytics company CoinGlass. That event came after Trump threatened China with yet another round of tariffs. Macroeconomic factors have only cemented crypto’s decline since then, as the likelihood of another rate cut by the Fed keeps getting slimmer.
Vetle Lunde, head of research at K33, took an optimistic stance in a report released on Tuesday, pointing to the broader institutional embrace of crypto this year. “We expect rosier times ahead due to accelerated institutional adoption amid an expansionary monetary environment,” he wrote.
Lunde predicts that Bitcoin will bottom out at $84,000-$86,0000 before it recovers. He says that previous drawdowns have lasted more than 50 days, and the current one is only on day 43.