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Crypto prices have declined sharply in recent weeks — and some analysts warn of more pain ahead for investors.
The price for bitcoin, the most popular cryptocurrency, sank below $66,000 on Thursday afternoon, touching its lowest level in more than a year. Analysts had been watching $70,000 as a key psychological threshold below which prices were likely to break further.
The digital asset has fallen nearly 50% from its recent high in October, when bitcoin peaked around $126,000. Bitcoin was down more than 10% during trading on Thursday as of 2:45 p.m. E.T.
Barry Bannister, chief equity strategist at Stifel, wrote in a research note Wednesday that bitcoin could ultimately bottom out around $38,000 — down about 70%.
He said he reached that conclusion based on trends and price moves during past “bitcoin super-bears,” or periods of steep downturns.
“This is not a ‘bull market correction’ or ‘a dip,'” Matt Hougan, chief investment officer at Bitwise Asset Management, a crypto money manager, wrote in a note Monday.
“It is a full-bore, 2022-like, Leonardo-DiCaprio-in-The-Revenant-style crypto winter — set into motion by factors ranging from excess leverage to widespread profit-taking by OGs,” Hougan wrote. OGs refer to early investors in bitcoin.
Crypto sell-off comes amid broad support by Trump
US President Donald Trump speaks during a the White House Crypto Summit in Washington, DC, March 7, 2025.
Jim Watson | AFP | Getty Images
The crypto sell-off comes amid broad support for cryptocurrency by President Donald Trump and his administration.
Trump promised to make the U.S. a “bitcoin superpower” while on the campaign trail, and said he wants to make the U.S. the “crypto capital of the world.” Trump signed an executive order within days of taking office to promote digital assets, and the White House and U.S. regulators have pursued supportive policies.
Bitcoin ETFs began trading on U.S. stock exchanges about two years ago, making it easier for investors to buy and sell crypto.
So, why have crypto prices dropped in recent weeks and months?
Because “good news doesn’t matter” In the “depths” of a crypto winter, as seen in 2018 and 2022, for example, according to Hougan.
“We’re not going to rally because Wall Street is hiring aggressively or Morgan Stanley is ramping up on crypto,” he wrote. “That will matter in the long term, but not now. Crypto winters don’t end in excitement; they end in exhaustion.”
Contributors to the crypto winter
The current one started in January 2025, he said.
However, it wasn’t readily evident at the time due to enthusiasm among institutional investors for digital assets — which “papered over” a “brutal winter” among retail investors, according to Hougan.
Analysts point to other contributors, too.
For example, “credit stress has risen in the tech sector” since mid-2025, dragging down prices for bitcoin, which are seen as a “speculative tech-stock-like instrument,” according to Stifel’s Bannister.
Bitcoin has also been selling off amid a broader pullback in growth stocks and amid “hawkish” interest rate cuts by the Federal Reserve, Bannister wrote.
“Hawkish cuts” — meaning the central bank cut interest rates while suggesting it could be a while before it cuts again — are “ominous” for bitcoin, which, similar to stocks in the Nasdaq 100, tends to move higher with “dovish” policy, Bannister wrote. Dovish policy aims for lower interest rates to promote economic growth and employment.
Crypto winters typically last about 13 months — meaning the current one may end soon, according to Hougan.
“What could cause the clouds to dissipate? Strong economic growth that sparks an aggressive risk-on rally, a positive surprise on the Clarity Act, signs of sovereign adoption for bitcoin, or just the passage of time,” he wrote.
Don’t hold more than 5% in crypto
For investors, the price decline makes it important to do a gut check about bitcoin and crypto, experts say.
Generally speaking, bitcoin is a volatile asset — meaning gains can be big, but so can losses. Financial advisors typically recommend that bitcoin and other digital assets be limited to a very small share of your portfolio.
“To me, no one should hold more than 5% in any concentrated asset,” said certified financial planner Carolyn McClanahan, founder of Life Planning Partners in Jacksonville, Florida, and a member of the CNBC Financial Advisor Council.
However, even with a small stake in crypto, you should “have a process for investing and understanding when to buy and sell,” said Ivory Johnson, CFP, founder of Delancey Wealth Management in Washington, D.C., who is also a member of the Council. He said he sold client holdings when the price was about $80,000, which still netted gains.
Crypto decline a ‘buying opportunity’?
As with any investment, you should know why you own cryptocurrency.
“In my opinion, if you’re optimistic about bitcoin long-term, then [this drop] is a buying opportunity,” said Barry Glassman, CFP, founder and president of Glassman Wealth Services in Vienna, Virginia, who also serves on the CNBC Financial Advisors Council.
He does not invest client assets in bitcoin, but said about half of his clients have exposure through either a brokerage account or crypto wallet.
It is a full-bore, 2022-like, Leonardo-DiCaprio-in-The-Revenant-style crypto winter.
Matt Hougan
chief investment officer at Bitwise Asset Management
Glassman also pointed out that bitcoin has had huge drops before. In November 2022, for instance, it was trading at about $16,360 after hitting $65,500 a year earlier — a 75% drop.
On the other hand, if you bought bitcoin at a higher price than it is now, “ask yourself, ‘Would I buy bitcoin today?'” McClanahan said.
“If you can’t say to yourself that yes, you’d buy today, then you should probably sell your holdings,” she said.
Tax considerations
If you do sell bitcoin at a lower price than when you purchased, you can use those losses to offset gains you earn from other investments and rebalance your portfolio — so-called tax-loss harvesting.
Also, be aware of the wash-sale rule, which disallows the loss if you buy the same or substantially identical investment within 30 days.
If you own bitcoin directly, it is not subject to the rule: You could sell and then quickly rebuy and still realize the losses. However, if you own bitcoin through an ETF, any losses at sale are subject to the rule — so you’d have to wait at least 30 days to repurchase.
Also, if your losses exceed your gains for the year, you can use up to $3,000 of the loss to offset other income on your tax return, McClanahan said. Any leftover loss carries forward to future tax years.