Bitcoin, one of the year’s best performing assets, has fallen sharply, plunging almost 10% as traders brace for a huge price game-changer.
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The bitcoin price hit an all-time high of $123,000 per bitcoin in July, riding a wave of optimism stoked by president Donald Trump’s White House, Wall Street giants, and dozens of bitcoin treasury companies—with some predicting an imminent $50 trillion earthquake.
Now, as fears of collapse and a Federal Reserve crisis hit the U.S. dollar, bitcoin traders are scrambling to get ahead of what could be a major market crash.
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The bitcoin price has fallen sharply, dragging down the wider crypto market that’s lost a combined $300 billion since last week.
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“We may be on the brink of another 1929 crash and another Great Depression,” investment guru and Rich Dad, Poor Dad author Robert Kiyosaki posted to X this week, pointing to investment legends including Warren Buffet and Jim Rogers who have sold many of their investments.
“I sit tight with gold, silver, and bitcoin,” Kiyosaki added.
However, the bitcoin price fell this week following the latest round of U.S. trade tariffs, plummeting along with stock markets as the U.S. economy added far few jobs than expected in July and earlier months were massively revised down.
“There’s a lot of risk in bitcoin,” gold bug Peter Schiff, the chief economist at Euro Pacific Asset Management and an outspoken bitcoin critic, said during an X Spaces broadcast.
“Days like today make it clear that bitcoin is not digital gold,” Schiff added in an X post. “We got bad economic news that sent gold and the Japanese yen up 2.2% and the euro up 1.5%. The Nasdaq went the other way, falling 2.2%. Bitcoin tanked 3%, tracking high-risk assets lower, not safe havens higher.”
Bitcoin has rocketed around 650% since it dropped to lows of $16,000 per bitcoin in late 2022, with half of those gains coming in just the last year.
“Bitcoin has given up almost half of its gains from the lows at the start of the month to the peaks on 14 July,” Alex Kuptsikevich, FxPro chief market analyst, said in emailed comments.
“Heavy selling in the second half of the month is darkening the clouds, but it will take more than just fatigue and a lack of news to reverse the trend. Last month and August 2024 also saw a weak start, so this comes as no surprise.”
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The bitcoin price has made huge gains in recent years, leading to fears a bitcoin price crash could be around the corner.
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August has historically been a losing month for the bitcoin price, which could weigh on the market.
“In terms of seasonality, August is considered one of the two most unfavourable months for bitcoin,” Kuptsikevich said. “Over the past 14 years, bitcoin has ended the month with growth only five times and has declined nine times. For the last three years, bitcoin has been unsuccessful.”
However, bitcoin and crypto holders are upbeat following some of the biggest ever developments for crypto on Wall Street and in the Trump White House.
“Bitcoin’s consolidation after a period of successive all-time highs comes as no surprise. Yet again, inflationary fears have risen as tariffs and geopolitical uncertainty linger, spooking both crypto and traditional markets,” Gadi Chait, head of investment at Xapo Bank, said in emailed comments.
“Still, in the week that the White House crypto report set a precedent for the growth of the crypto industry, the bigger picture for bitcoin remains hopeful. This extraordinary endorsement from the highest levels of government underscores just how mainstream bitcoin has become.”
Chait also pointed to bitcoin exchange-traded fund (ETF) flows, which have “served as a key barometer of institutional sentiment, with outflows of $114.69 million recorded on July 31 signalling tactical de-risking” ahead of Trump’s August 1 tariff deadline.
“In recent times, bitcoin has proven its ability to weather turbulence inflicted by external factors, an encouraging sign of its increasing maturity,” Chait said. “Our conviction in bitcoin’s long-term potential still stands, undeterred by short-term price fluctuations.”