Bitcoin gets slashed in half. What’s behind the crypto’s existential crisis
bitcoin It fell to $60,000 this week as investors reassessed its utility. While there is no clear catalyst driving the bloodbath, one thing is clear: The crypto market is in crisis.
“There’s nothing in the market that warrants this kind of crash,” Anthony Scaramucci, founder and managing partner of alternative investment firm SkyBridge, told CNBC. “And I think that, frankly, has made people even more fearful. … You have to ask yourself, ‘Is it all over for Bitcoin?'”
Bitcoin fell to $60,062 on Thursday, its lowest level since October 11, 2024. This is a decline of more than 52% from the record high of $126,000 in early October 2025.
The previous session was one of Bitcoin’s bloodiest to date, with the token losing more than 15% of its value during the day. The daily relative strength index fell to 18, putting the asset in oversold territory. Other digital assets as of Thursday ether And fade away They are down 24% and 26% respectively since the beginning of the week; It’s a sign that investors’ confidence in the crypto market as a whole is waning.
Bitcoin rebounds but losses loom large
Bitcoin was: The recovery occurred on Friday, with the token last trading at $69,631.97, up more than 9% on the day.
But the recent decline has led investors to reassess its utility, including its role as a digital currency or store of value. Simultaneously, institutional appetite for the flagship cryptocurrency appears to be waning, with spot bitcoin exchange-traded funds posting outsized outflows, threatening to push bitcoin further into the red.
“This time is significantly different from other bear markets, but it is not a response to a structural implosion,” said Jasper De Maere, desk strategist at crypto market-making firm Wintermute, in a statement shared with CNBC. “This is essentially a macro-focused deleveraging that depends on positioning, risk appetite, and narratives rather than systemic failures within crypto itself.”
Bitcoin prices last year
Over the past few months, investors have become increasingly skeptical of efforts to recast Bitcoin as “digital gold” or an alternative to traditional safe havens. gold. While Bitcoin has fallen 28% in the last 12 months, gold has risen 72% in the same period; which is a testament to how useful the latter is as a hedge against macro risks.
Conversely, Bitcoin has frequently fallen alongside other risk-bearing assets such as stocks during periods of high macroeconomic and geopolitical uncertainty, raising doubts about its usefulness as a safe haven. About a week after Trump’s “liberation day” tariff announcement on April 2, 2025, Bitcoin fell nearly 10%, falling below $80,000. S&P 500 It decreased by approximately 4%.
Separately, investors are also reassessing the extent to which financial institutions, treasury firms and governments are willing to adopt bitcoin, which has been a major catalyst for the token in recent years.
As investors prepare for Bitcoin’s decline, large institutional outflows are on the rise as the token’s liquidity dwindles, according to a recent analyst note from Deutsche Bank.
According to the investment firm, these outflows have also attracted attention among spot Bitcoin ETFs in recent months. The funds saw outflows of more than $3 billion in January, in addition to nearly $2 billion last December and nearly $7 billion last November.
Additionally some Strategy Copycats that have emerged over the past year have slowed or paused their purchases of bitcoin as the digital asset corrected.
Finally, traders acknowledged that long-standing efforts to market Bitcoin as an alternative to fiat currencies have largely diminished. While Steak ‘n Shake and Compass Coffee have offered support for Bitcoin payments in recent years, attempts to make the asset a form of payment have largely died out, especially as interest in dollar-pegged stablecoins grows, according to Bitwise’s Ryan Rasmussen.
Rasmussen argued that the token’s purpose has evolved from a currency to a decentralized, unmanageable store of value, saying, “We’re seeing Wall Street embrace stablecoins because it’s a fundamental transformation in the way payments work, and Bitcoin is just a different asset. It’s not designed for that today.” he said. “I have never paid for coffee or a sandwich with Bitcoin and I never will.”
Beyond these immediate concerns, investors are increasingly worried that Bitcoin’s underlying network could be hacked and the token could collapse to zero.
“This is definitely a risk that is gaining more attention as investors become concerned. [it]“I think you’re seeing some of that risk priced in in Bitcoin,” Rasmussen said.
He noted that Bitwise is allocating funds to efforts to mitigate the threat from quantum computing.
However, traders’ appetite for Bitcoin has greatly diminished and its price has fallen. That’s true, though despite the charts and naysayers, longtime believers are still proudly betting on Bitcoin.
“I believe the story is solid,” Scaramucci said, adding that he purchased Bitcoin for his fund on Thursday. “But I don’t have a crystal ball… Who knows?”
