Bitcoin plummets 40% since october, returns to pre-trump levels

Bitcoin is collapsing. The star cryptocurrency has lost 40% since its peak of $126,000 in October.

The drop brings Bitcoin back to pre-Trump prices. Traders are panicking over this decline that began in November and has been accelerating since. U.S. and European regulators are tightening their grip, pushing investors to exit. Pressure is mounting from all sides, and it’s reflected in the prices.

No respite in sight.

In January, the U.S. Treasury Department launched a major crackdown on money laundering through cryptocurrencies. Binance and Coinbase are seeing their volumes melt away. Users are hesitant, wary of the new regulations coming their way. Some analysts believe this isn’t the end, with further drops possible. And with the Fed raising rates, investors are favoring bonds over risky cryptocurrencies.

Bitcoin also faces competition. Ethereum and Solana are gaining market share. They’re attracting more and more people, eroding Bitcoin’s historical dominance. Miners are struggling too, with electricity costs rising. Their profitability is taking a hit.

On January 15, Kraken suspended its operations following a cyberattack. This added to the instability.

Five days later, the ECB published a report warning about the risks of cryptocurrencies to financial stability. Investors took this as a warning. Warren Buffett added fuel to the fire on January 25: “Bitcoin is a mirage.” His words caused a stir in the financial community. MicroStrategy, a major Bitcoin holder, remains silent on this decline. Their silence is intriguing. Related coverage: Bitcoin Falls Below , 000.

BlackRock dropped a bombshell on January 28. According to them, institutional interest in Bitcoin is waning. Too volatile, too murky in terms of regulation. Tesla reduced its Bitcoin holdings by 10% at the end of January to mitigate risks. But Cathie Wood of Ark Invest took the opposite bet: $500 million in purchases on February 1. She’s betting on the long term despite the current storm.

Grayscale has cut its Bitcoin positions. Down 15% in its flagship fund at the beginning of February.

Mike Novogratz of Galaxy Digital remains optimistic but cautious: “Bitcoin has disruptive potential, but beware of short-term risks.” He spoke from New York on February 2. The same day, Chainalysis released a worrying report: suspicious Bitcoin transactions have jumped 20% since January. This raises questions about the security of exchange platforms.

Fidelity is holding firm. The asset manager maintains its Bitcoin positions and believes in the long-term cycle of cryptocurrencies. A spokesperson said they are sticking to their investment strategy despite the turbulence. For them, it’s cyclical.

Trading volumes are dropping everywhere. Platforms are seeing their users become more discreet. The new regulations on the horizon are frightening, especially in the United States where controls are increasing. Europe is following suit with its own measures. This follows earlier reporting on Bitcoin Plunges as Villeroy de Galhau.

Miners are suffering doubly. First, the Bitcoin price is falling, then electricity costs are soaring. Some are shutting down, others are relocating to cheaper countries. The computing power of the Bitcoin network remains stable for now, but that could change if the situation persists.

Investment funds are divided. Some, like Ark Invest, see a buying opportunity, while others, like Grayscale, prefer to reduce exposure. Institutions are waiting for clearer signals before making a move. No one wants to take unnecessary risks in this context.

Technical analysis shows Bitcoin below $80,000, far from its October peak. The psychological supports of $70,000 and then $60,000 are in traders’ sights. If they break, the drop could accelerate towards $50,000, a level that would bring Bitcoin back to mid-2024 prices.

Global central banks are coordinating their efforts against cryptocurrencies. The Bank of Japan joined the movement on February 3 by announcing restrictions on crypto investments by Japanese financial institutions. The Bank of England is echoing this with a strict regulatory framework planned for 2025. Mark Carney, former governor, stated that “the era of regulatory complacency is coming to an end.” The domino effect is spreading: Australia, Canada, and Switzerland are considering similar measures.

Tech giants are also changing course. Microsoft quietly removed Bitcoin from its treasury in January, following PayPal’s example, which reduced its crypto services by 30%. Amazon Web Services has suspended several blockchain projects, citing “growing regulatory uncertainty.” Meanwhile, hackers are taking advantage of the chaos: $2.1 billion stolen from crypto platforms since the beginning of 2025, according to Chainalysis. A chilling record. Crypto insurers are increasing their premiums by 40% in response to this surge in cyberattacks.