Bitcoin’s Dramatic Plunge: Is the Sky Falling or Just a Bad Hair Day? 😱💸

by

What to know:

  • BTC hit a low of $88,500, a level last seen in mid-November. Yikes! 😬
  • BTC’s weakness is consistent with the decline in the global money supply early this year. Who knew money could be so moody? 💔

So, Bitcoin (BTC) decided to take a little dip below $89,000 during Tuesday’s early European hours. It’s like it’s trying to be the next Olympic swimmer, but instead of gold, it’s just sinking! 🏊‍♂️💦 Nasdaq futures are pointing to continued losses in tech stocks, and the Japanese yen is flexing its muscles, making everyone a bit jittery, like a cat on a hot tin roof. 🐱🔥

The leading cryptocurrency hit a low of $88,500, a level last seen in mid-November. CoinDesk data shows that the losses follow a recent reluctance to adopt state-managed bitcoin reserves in the U.S. Apparently, nobody wants to play with Bitcoin at the state level. 🙄

“Despite U.S. President Donald Trump’s recent pro-Bitcoin stance, three state-level proposals for Bitcoin reserves failed in Montana, North Dakota, and Wyoming. It’s like trying to convince your parents to let you invest in a pet rock,” said Valentin Fournier, analyst at BRN. “The reluctance to adopt state-run Bitcoin reserves underscores the political risks, as policymakers avoid accusations of speculating with taxpayer funds.” Classic! 😂

“A nationwide reserve strategy—potentially backed by a bond issuance or a partial sale of U.S. gold reserves—could be a more viable path for future adoption,” Fournier added. Because who doesn’t love a good old-fashioned government bond? 🙈

According to some observers, BTC’s weakness is consistent with the decline in the global money supply early this year. “There appears to be a lag between global money supply and BTC,” Andre Dragosch, head of research Europe – Biwise, said on X, noting the BTC price drop. Note that the money supply has bottomed out recently, meaning BTC’s price swoon may not last for long. Fingers crossed! 🤞

For now, the focus seems to be on traditional markets, which are giving off serious risk-off vibes. Nasdaq futures dipped 0.3% early today, signaling an extension of a three-day losing streak. The tech-heavy index has dropped over 4% since Feb. 18. Talk about a bad hair day for tech stocks! 💇‍♂️

The anti-risk Japanese yen traded at 149.38 per USD and looked set to challenge the near three-month high of 148.84 hit Monday. The JPY has strengthened nearly 6% in six weeks on bets that the Bank of Japan (BOJ) will raise rates. It’s like the yen is on a diet and feeling fabulous! 💪✨

The BOJ rate hike talk and the yen strength has revived memories of July when the yen surged on the central bank’s rate hike, eventually leading to a broad-based risk aversion that saw bitcoin crash from roughly $65,000 to $50,000 within days. Ouch! That’s gotta hurt! 😱

“Massive Yen strengthening – sometimes occurs with big risk off,” Joseph Wang, operator of the research portal fedguy.com said last week. And here we are, just trying to keep our heads above water! 🌊

UPDATE (Feb. 25, 09:12 UTC): Adds additional details. Because we all need more drama in our lives, right?

Read More

2025-02-25 12:17