The bitcoin price dipped below the $60,000 mark on Friday, which brought it down to a level not seen since October 2024, before Donald Trump’s U.S. presidential election win the following month. Trump has enacted several policies seen as beneficial to bitcoin and the greater crypto industry, such as the removal of Gary Gensler as the head of the SEC, the establishment of a strategic bitcoin reserve, and a pardon for convicted Silk Road operator Ross Ulbricht, a notable part of his campaign. And for a while, the market loved it.
After the bitcoin price reached a new all-time high around $125,000 last October, the crypto market as a whole has suffered, with privacy-focused altcoin Zcash also seeing a 60% drop in the last couple of days following the disclosure of a critical bug.
For those who don’t remember, the bitcoin price rose from around $66,000 to nearly $110,000 in the weeks that followed Trump’s 2024 election win. However, those previous gains have now been more than completely retraced. While some say the recent bitcoin price weakness has to do with bitcoin treasury company Strategy’s recent sale of a miniscule percentage of their overall bitcoin holdings, others within the industry say the recent sell pressure has more to do with bitcoin holders wanting to gain more exposure to the AI industry, whether it be through the upcoming initial public offerings of OpenAI and Anthropic or the planned $80 billion capital raise by Google parent company Alphabet for the purpose of expanding the infrastructure for Gemini. Of course, then there’s Mark Cuban, who said he sold his bitcoin after it failed to act as “digital gold” during recent geopolitical turmoil.
“AI is sucking all of the oxygen out of the room, all of the liquidity out of the room,” Forest For The Trees founder and CEO Luke Gromen noted in a recent interview with Coin Stories. “I think that’s happening to bitcoin as well. I think it’s a victim of that as well.”
While the Trump administration has delivered on some promises to the crypto industry through actions like the pardoning of Ulbricht and the passage of the stablecoin-focused GENIUS Act last year, the bill that is intended to solidify regulatory clarity for the rest of the crypto industry, known as the Clarity Act, is still being debated in the Senate. As part of those debates, the banking and crypto industries have been battling over the legality of offering interest and other types of rewards to stablecoin holders, with JPMorgan Chase CEO Jamie Dimon going as far as to say Coinbase CEO Brian Armstrong is “full of shit” in a recent interview.
Many Senate Democrats, and even some Republicans, would also like to see ethics-related language added to the bill, as the estimated $1.4 billion in 2025 profits associated with various crypto projects that have found their way into the Trump family’s collective pockets are under growing scrutiny. The multiple accusations of outright corruption related to the Trump-affiliated crypto project World Liberty Financial, such as the circumstances around the pardoning of former Binance CEO Changpeng Zhao, are also a key concern for Democrats. According to one recent poll, 62% of the American public does not trust Trump to fairly regulate the crypto industry.
While the bitcoin price has been struggling in recent months, Zcash is going through even worse issues. The Zcash price dropped more than 60% in a couple of days amidst the disclosure of a bug that could have allowed an attacker to create artificial Zcash currency out of thin air. Notably, the bug was found by a researcher using Anthropic’s Claude Opus 4.8 model and existed in the wild for roughly four years. Recently, blockchain security pioneer Manuel Aráoz warned that the progress of various AI models has made decentralized finance (DeFi) unsafe for anyone to use for the time being.
This most recent incident was the second time a bug that could have allowed an attacker to generate fake Zcash has been found on the network. Zcash developers are now working on a method to better audit the Zcash supply, as the inability to do so is a common critique of this class of privacy-focused cryptocurrencies. It is currently unknown whether either of these two vulnerabilities was used to create Zcash currency out of thin air, as it simply cannot be verified.
Zcash had been one of the best-performing crypto assets in recent months before this most recent bug, and despite the recent price crash, it’s still up more than 500% over the past year. The price has recovered to around $325 after bottoming out at roughly $250 Friday morning.