Bitcoin’s Slump Can Worsen as Icy Winter Sets In
Even a president may not be able to prop up crypto currencies.
Photographer: Ian Maule/AFP/Getty Images
In a matter of hours, Bitcoin has crashed through several psychological price levels that are liable to give cryptocurrency evangelists and newcomers from TradFi sleepless nights. At the time of writing, the token is bouncing around $65,000 after dropping to as low as $60,000 on Friday. While that’s certainly a long way from zero, it’s also well below its October peak of $126,000 and down from the $70,000-$80,000 average purchase price paid by exchange-traded funds and vehicles like Michael Saylor’s Strategy Inc., which reported a net loss of $12.4 billion on Thursday.
Even for an asset with no intrinsic value that’s known for epic drawdowns and Wild West volatility, this is heady stuff. A Bitcoin drop of around 20% in three days is reminiscent of the kind of falls seen in 2022, when the FTX exchange imploded, even if today plenty of other assets also look overstretched from precious metals to tech stocks. A particularly severe type of crypto winter appears to be drawing in that will test the faith of all but the most committed — or deluded — HODLers to continue holding on for dear life.