Bitcoin (BTC) dropped below $85,000 on Friday, extending the recent sell-off in the crypto market. This is its lowest level since April, when it briefly dipped below $75,000. Despite strong institutional demand and a crypto-friendly stance from Donald Trump, Bitcoin is now down nearly 30% from its record high earlier in October.
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Earlier this week, Bitcoin had briefly bounced back to $93,000 after Nvidia (NVDA) reported strong Q3 earnings, but the rebound didn’t last.
What’s Driving the Plunge?
This drop isn’t happening for a single reason. Multiple pressures are hitting the market simultaneously, including weak macroeconomic conditions, ETF withdrawals, and BTC selling.
Investors are growing uncertain about U.S. rate cuts, and rising inflation fears are weighing on risk assets, including crypto. Meanwhile, spot Bitcoin ETFs have seen huge withdrawals this month. Notably, BlackRock’s (BLK) IBIT (IBIT) saw a record single-day withdrawal of $523.2 million on Tuesday, adding to selling pressure across the crypto market.
Adding to the pressures, Bridgewater founder and billionaire Ray Dalio recently reaffirmed his cautious views on Bitcoin. He argued that Bitcoin cannot become a true reserve currency because its transactions are fully transparent and potentially vulnerable to future technologies like quantum computing.
Additionally, on-chain data shows Bitcoin whales and long-term holders sending large amounts to exchanges, suggesting profit-taking after this year’s strong rally. Adding to the concern, Owen Gunden, one of the wealthiest early Bitcoin holders, reportedly sold his entire position yesterday, fueling anxiety among retail investors.
Will BTC Recover?
Yes, but the recovery won’t look the same as before. Bitcoin may recover more slowly, weighed down by its size and institutional flows, while smaller tokens with low market caps and strong retail momentum could rally faster. Some forecasts for Bitcoin in 2025 suggest it could rise to over $100,000, showing that crypto can gradually climb back even after sharp declines.
Interestingly, not everyone in the industry thinks the recent Bitcoin drop is bad news.
On Tuesday, former U.K. Chancellor Kwasi Kwarteng took a different view, saying investors should see the pullback as a chance to buy more. He said, “We can stack more Bitcoin for less.”
Meanwhile, investor Mike Alfred was even more bullish. In an interview, he called Bitcoin “the most important asset in all of human history to own.”
Year-to-date, BTC is down by just 1.16%.
