Bitcoin (BTC), the world’s largest cryptocurrency, took a sharp turn downwards late Thursday, falling 5% to a new yearly low of $80,100. This represents the lowest level Bitcoin has seen since the opening of 2025, according to data from CoinGecko. This downward trend in the crypto market was not limited to Bitcoin; Ethereum (ETH), the second largest cryptocurrency, also experienced a significant decline, dropping 8% to $2150. This marks a 14-month low for Ethereum.
The wider crypto market has also seen a surge in liquidations, surpassing $220 million within the past hour alone. Bitcoin long positions account for almost half of this total, as indicated by CoinGlass data. While this figure is considerably lower than Monday’s reported $600 million in liquidations, the shift signifies a decline in sentiment that had previously been buoyed by the inauguration of U.S. President Donald Trump.
The U.S. stock market followed suit on Thursday, closing with notable losses. The S&P 500 slid 1.6%, the Dow Jones Industrial Average registered a 0.4% decrease, and the Nasdaq Composite fell by 2.8%. This downturn was driven by a sell-off in tech stocks, led by Nvidia, and the looming threat of potential tariffs from President Trump, both of which significantly dampened investor sentiment.
Investor confidence has been shaken by increasing concerns that President Trump will impose taxes on foreign imports from the EU, Mexico, and Canada. This is an economic policy that has been met with mixed reactions from economists. Some warn that such a move could stoke inflation, while others see potential benefits, arguing that these measures could stimulate domestic industry and foster economic growth.
Despite this ongoing debate, many analysts that Decrypt has previously spoken to suggest that the continuing conflict in Ukraine is a more significant factor influencing the current market cycle.
In the face of this uncertainty, investor sentiment is leaning towards caution. Capital is flowing into the perceived safety of U.S. Treasuries and the dollar, as traders seek refuge from the mounting uncertainty that characterizes the current economic landscape. This latest development in the crypto market serves as a stark reminder of the volatility inherent in this type of investment, and the need for investors to maintain a cautious approach in managing their portfolios.
