Investors have dumped their Bitcoin after it fell below a key threshold, sparking major sell-offs.
The world’s largest cryptocurrency has dived more than 27 per cent over the past six months after skyrocketing in the 11 months after Donald Trump was elected.
Bitcoin’s plummet continued on Monday, sinking another 3.2 per cent and falling past the US$88,000 threshold.
This figure has historically acted as a “magnet point” for liquidity and breaching this threshold can trigger automated sell order, according to research and analytics platform CryptoRank.
The major cryptocurrency fell to about US$86,000 before rebounding to $87,500.
Trader Peter Bandt predicted Bitcoin would slump to between US$52,000 and US$62,000 while the odds of the cryptocurrency surging to US$100,000 in January fell to three per cent on betting website Polymarket.
Steve Hanke, a professor of applied economics at Johns Hopkins, compared investing in Bitcoin to gold, which has surged almost 50 per cent since August.
“Bitcoin = Fool’s gold,” Mr Hanke posted on X.
After breaching the threshold, US$315m in liquidations took place over about four hours, according to CoinGlass.
Bitcoin is not the only cryptocurrency to fall on tough times recently.
The world’s second largest cryptocurrency Ethereum has sunk more than 25 per cent over the past six months while XRP is down 42 per cent.
The crash comes as Bitcoin in 2025 had its first annual loss since 2022 after a rollercoaster year.
The world’s largest cryptocurrency skyrocketed after Donald Trump’s election win in late-2024 as investors lauded the crypto-friendly US President’s win as a boon for the currency.
This momentum took a hit around April when Trump revealed his sweeping tariffs that rocked global markets.
Bitcoin bounced back, however, and soared over the coming months to its high point of $188,000 before sliding about 30 per cent to $132,000.
This downturn occurred after the US President announced a new tariff on Chinese imports and threatened export controls on critical software.
That sparked more than $19 billion worth of liquidations across leveraged crypto market positions, the largest liquidation in crypto history.
It ended the year down about six per cent – a markedly worse performance than major US indexes such as the S&P 500 (up 16 per cent), Nasdaq Composite (up 19 per cent) or the Dow Jones (up 13 per cent).