The world’s leading cryptocurrency, Bitcoin, has fallen to its lowest price since April, trading at nearly $81,000 late Thursday night, a drop of nearly 2% within 24 hours. This decline has brought it beneath its previous support level of $82,175 recorded in November. As of Friday, Bitcoin made a slight recovery, now trading at approximately $82,290 according to Binance data. Alongside Bitcoin’s downturn, Ethereum has also reported a significant decrease, down 4% over the past day to around $2,660.
The recent sharp decline in cryptocurrency prices has been mirrored in the precious metals market, where gold has seen an 11% drop within the past day, while silver plummeted by an astounding 31%. Other metals like platinum and copper are also experiencing declines, indicating a broader trend of volatility.
These fluctuations in both crypto and metal markets coincide with President Donald Trump’s announcement of his nomination of Kevin Warsh to replace Jerome Powell as chair of the U.S. Federal Reserve. The financial landscape has been further complicated by investor jitters regarding substantial investments in artificial intelligence (AI) by major technology firms. Despite Microsoft posting strong earnings, overall investor sentiment was unfavorable, leading to a more than 10% drop in its stock during after-hours trading.
Market analysts suggest that the anxiety surrounding increased AI spending without concrete earnings is unsettling broader risk assets. Matt Howells-Barby, a vice president at the crypto exchange Kraken, noted that concerns about heavy investments in AI led to the recent downturn.
Additionally, Jake Ostrovskis, head of OTC trading at Wintermute, pointed out that the decline in Microsoft stocks, coupled with falling gold prices, catalyzed a shift toward lower prices in other high-risk assets.
Bitcoin has shown a weakening trend since the beginning of October, especially after tariff threats from Trump preceded a significant market crash. Historically, Bitcoin’s performance has been closely tied to tech stocks; however, there has been a noticeable divergence in recent months. Bitcoin has dropped more than 30% since early October, contrasting with the S&P 500, which has risen nearly 3%.
While some analysts view the current situation as an indication of a bearish trend in the crypto market, others maintain a more optimistic outlook. Despite the current challenges, institutional interest in stablecoins and the emergence of new crypto regulations have some experts believing that current conditions may simply signify a temporary downturn. Alex Kuptsikevich, chief market analyst at FxPro, described the situation as “just a mild Crypto Winter.” This perspective offers a glimmer of hope amidst the prevailing market challenges, suggesting potential recovery on the horizon as the market adjusts.