Bitcoin is having its worst month since the Celsius Network (there’s a name we haven’t thought about lately) collapsed and Sam Bankman-Fried’s FTX exchange began its spectacular implosion.
What happened: The cryptocurrency has lost nearly a quarter of its value this month, its worst single-month performance since June 2022, according to data compiled by Bloomberg.
Why it’s happening: Without ‘fundamentals’ like earnings to point to, it’s always tricky to nail down why bitcoin prices fluctuate, but you can have your pick of theories circulating…
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Investors are shying away from risk right now because of worries about a bubble in AI stocks and concerns that the Fed won’t cut interest rates as much as previously expected — crypto tends to fare poorly when speculators get cautious.
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Large bitcoin holders are selling their positions, driving the price down — one crypto wallet has unloaded US$1.3 billion worth of bitcoin in the past month, for example — and the struggling broader crypto market is creating forced sellers.
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Bitcoin has benefited from a crypto-friendly White House, but fresh polling shows Donald Trump’s popularity sinking, and there are signs that his grip on the Republican Party may be slipping.
Our take: Bitcoin was supposed to be a safe haven asset, but despite finally getting the blessing of U.S. regulators, political leaders, and big financial institutions, it’s still trading more like a volatile meme stock than something you’d want to hold for your rainy day fund.—TS
