Prices of the original cryptocurrency Bitcoin fell to its lowest level in over a year as investors withdrew amid a growing consensus that the crypto bubble may have burst
Bitcoin prices slump to its lowest since US President Donald Trump’s re-election (file image)(Image: Getty Images)
The price of digital currency Bitcoin slid further this week, slumping to its lowest level since United States President Donald Trump was re-elected.
The original cryptocurrency fell another 11% on Thursday, February 5 to $67,000. It is now worth less than it was Trump was elected to his second term in office in November 2024, the Associated Press reported.
Pitched as “digital gold,” Bitcoin has lost nearly half of its value since October 6, when it hit a record high of $126,210.50, according to crypto trading platform Coinbase. The currency was trading at $66,301 as of 2pm US eastern time.
“This steady selling in our view signals that traditional investors are losing interest, and overall pessimism about crypto is growing,” said Deutsche Bank analyst Marion Laboure on Wednesday.
Bitcoin prices gained higher for the better part of a year after Trump’s re-election, partly due to improved investors expectations of a more crypto-friendly administration. These gains have now been erased.
The Bitcoin sell-off appears to be a combination of investors withdrawing from speculative assets like gold, silver and digital currencies, and worry over the future of cryptocurrency regulation in Washington, the AP reported. Trump has, however, heavily backed cryptocurrency companies since his election.
Experts have also said that Trump’s nomination of Kevin Warsh for chair of the Federal Reserve also played a part in Bitcoin’s collapse.
The White House hosted banks and cryptocurrency companies at an event this week to determine whether common ground could be found on pending legislation that would regulate stablecoins.
The AP reported that the cryptocurrency industry wants to be able to pay customers for holding their deposits in crypto or stablecoins, a move that the banking industry would oppose. Banks believe cryptocurrency accounts providing a dividend or yield would reduce money in the traditional banking system. Presently it appears the bill is not going to move forward in Congress, the AP reported.
American Bitcoin, in which the US president’s sons Eric Trump and Donald Trump Jr. hold a stake, fell 6.6% and is now down more than 80% since Oct. 7.
Other Trump-related crypto ventures have also fallen.