Web Desk (MNN); Bitcoin’s value has seen a steep decline after touching record levels last month, briefly falling below 90,000 dollars on Tuesday compared to more than 126,000 dollars at the beginning of October.
The cryptocurrency had crossed 100,000 dollars in May and then surged to its latest high of around 126,251 dollars last month. Analysts say the earlier rally was supported by expectations that the US Federal Reserve might cut interest rates following weaker jobs data, which had pushed down the dollar.
However, uncertainty increased after President Donald Trump reignited fears of a trade war with China last month, prompting investors to retreat from highly volatile assets like cryptocurrencies and move toward safer options.
As bitcoin reversed course, many investors who had expected its rise to continue suffered large losses. According to Rachael Lucas, a crypto analyst at BTC Market, nearly 20 billion dollars’ worth of bitcoin trades were liquidated.
Between its October peak and this week’s drop below 90,000 dollars, bitcoin lost roughly a quarter of its value. Other digital currencies also fell on Tuesday, including Dogecoin, the speculative token often promoted by Elon Musk.
Financial markets in general have come under pressure following the longest US government shutdown in history, which delayed key economic data releases. These indicators are considered crucial in determining how far the Federal Reserve might ease interest rates in the months ahead to support the economy.
Adding to market uncertainty, some Fed officials have hinted that a rate cut may not be on the table at the central bank’s December meeting. This has strengthened the dollar but weighed heavily on stocks and cryptocurrencies.
Simon Peters, an analyst at eToro, said that renewed expectations for a December rate cut, supported by positive economic data, could quickly trigger a rebound in bitcoin and other digital assets.
Looking ahead, experts remain cautious. John Plassard, head of investment strategy at private bank Cite Gestion, said the latest downturn reflects a deeper concern — that many investors remain wary after past crashes, especially in digital currencies considered even more speculative than bitcoin.
Thomas Probst of Kaiko, a crypto data platform, noted that extreme price volatility continues to hinder broader adoption of cryptocurrencies at both retail and institutional levels.
Still, the sector has benefited from growing interest among institutions and increased regulatory openness. Beyond the United States, the European Union has implemented its own MiCA regulatory framework, while the United Kingdom is expected to introduce its own crypto rules by 2026.
Created in the aftermath of the 2008 global financial crisis, bitcoin was originally associated with a libertarian vision that sought to challenge traditional monetary institutions such as central banks. The founding white paper, dated October 31, 2008, was authored under the pseudonym Satoshi Nakamoto, whose identity remains unknown.
