Bitcoin has taken a massive hit this week, plunging to its lowest level since November and heading for its steepest weekly decline in over two years. The cryptocurrency has dropped 16% in just a few days, marking its worst performance since the dramatic collapse of FTX in 2022.
Several factors have contributed to this sharp selloff, including a broader decline in tech stocks, growing uncertainty around U.S. crypto regulations, and a massive $1.5 billion hack that has shaken investor confidence.
Bitcoin Caught in a Perfect Storm
On Friday, Bitcoin tumbled as much as 7% to $78,273, extending its losing streak to five consecutive days. This comes amid a wider selloff in the tech sector, as investors grow increasingly worried about inflation, economic growth, and trade policies under U.S. President Donald Trump.
Matt Simpson, a senior market analyst at City Index, noted that Bitcoin traders are frustrated by Trump’s lack of focus on crypto deregulation, saying, “Inflationary pressures are rising, growth is slowing, and Trump’s tariffs remain in place. Crypto investors were hoping for deregulation, but that hasn’t been a priority for the administration.”
Bitcoin has historically moved in line with high-growth tech stocks, which tend to perform well in optimistic economic conditions. However, with concerns mounting over global trade policies and slowing growth, the Nasdaq has also hit its lowest level since November, further weighing on Bitcoin’s price.
Regulatory Doubts and Security Breaches Fuel the Downtrend
Adding to the bearish sentiment, uncertainty surrounding U.S. crypto policies is keeping institutional investors on edge. When Trump first took office, there was optimism that he would push for a more crypto-friendly environment, but so far, no clear regulatory changes have been made.
At the same time, the broader crypto market was rattled by a record-breaking hack at Bybit, the second-largest crypto exchange after Binance. Hackers stole around $1.5 billion worth of Ether, making it the biggest crypto heist in history. This security breach has significantly dented confidence in digital assets, leading to further selloffs across the industry.
Massive Outflows from Bitcoin ETFs and Falling Crypto Stocks
Institutional investors have been pulling money out of Bitcoin at an alarming rate. U.S.-listed Bitcoin exchange-traded funds (ETFs) have seen outflows of $2.27 billion this week alone, highlighting a shift in sentiment.
Joshua Chu, Co-Chair of the Hong Kong Web3 Association, believes the latest crash proves that Bitcoin is still a risky asset rather than a safe haven: “The recent price drop shows that Bitcoin remains speculative. The narrative of it being digital gold or an inflation hedge isn’t holding up.”
Meanwhile, crypto-related stocks have also taken a hit. In U.S. premarket trading, Coinbase Global (COIN.O) dropped 2.3%, while major Bitcoin mining firms like Riot Platforms Inc (RIOT.O) and MARA Holdings (MARA.O) saw their shares fall by about 3.5%.
What’s Next for Bitcoin?
While Bitcoin remains the dominant cryptocurrency, the current downturn is a stark reminder of its volatility. Investors are now watching key resistance levels to see if Bitcoin can stabilize or if further declines are on the horizon.
With ongoing regulatory uncertainty, macroeconomic concerns, and the aftermath of the Bybit hack, Bitcoin’s immediate future looks rocky. However, for long-term believers in cryptocurrency, market corrections like this are nothing new.
