Bitcoin plunged to its lowest level in over a year on Thursday, wiping out the entire rally built since the 2024 US presidential election and intensifying doubts over the cryptocurrency’s claim as a hedge in turbulent times. The world’s largest digital asset slid below the $64,000 mark and briefly touched an intraday low near $62,300, levels last seen in November 2024, triggering a fresh wave of selling across the broader crypto market.
With the fall, Bitcoin is now nearly 50% below its all-time high of around $126,000 recorded in October last year. Losses have accelerated sharply this week, with prices shedding over 20% in just a few sessions, underscoring the scale of the reversal and the fragile state of investor confidence in digital assets.
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‘Digital gold’ thesis under strain
The latest sell-off has reopened a long-running debate over Bitcoin’s role as “digital gold”. Historically, proponents have argued that Bitcoin mirrors traditional safe-haven assets during periods of geopolitical stress, pointing to episodes such as the Middle East conflict or the Russia-Ukraine war when prices broadly moved in line with gold.
This time, however, the divergence has been stark. While gold prices have climbed nearly 70% over the past 12 months, Bitcoin has fallen more than 30% over the same period, raising questions about its reliability as a store of value when risk aversion rises.
Market participants say the shift reflects a deeper reassessment of Bitcoin’s real-world utility. Despite years of evangelism, its adoption as a mainstream payment instrument remains limited, leaving prices heavily dependent on speculative flows rather than fundamental usage.
Broader crypto market hit
The weakness has not been confined to Bitcoin alone. Major alternative tokens have mirrored the downturn, with Ether and Solana plunging between 22% and 24% this week, erasing months of gains in a matter of days. The synchronised sell-off suggests a broad exit from crypto risk rather than asset-specific concerns.
Analysts note that the break below $70,000—long considered a key psychological and technical support—acted as a trigger for momentum-driven selling. Once that floor gave way, stop-loss orders and leveraged positions amplified the decline, pulling prices rapidly toward the $60,000–$65,000 zone.
Traditional investors step back
Strategists say the tone of the market points to waning interest from traditional investors who had entered crypto during the previous rally. “This steady selling signals that conventional investors are losing conviction, and overall pessimism toward crypto is growing,” said one European bank analyst in a recent note to clients.
The reassessment comes amid tighter global financial conditions, elevated bond yields and renewed caution toward high-volatility assets. As capital becomes more selective, cryptocurrencies—often seen as the riskiest corner of the investment universe—are among the first to feel the pressure.
Election gains fully reversed
Bitcoin’s post-election surge in late 2024 was driven by expectations of a more crypto-friendly regulatory stance in the US and renewed inflows into risk assets. That optimism has now faded, with investors realising that regulatory clarity has been slower than anticipated and that macroeconomic realities continue to dominate pricing.
At current levels, Bitcoin has surrendered all gains accumulated since the 2024 election, marking one of the sharpest sentiment reversals in its recent history. Traders say volatility is likely to remain elevated in the near term as markets search for a durable base.
What lies ahead
Technical analysts warn that failure to stabilise above the mid-$60,000 range could open the door to further downside, potentially testing support closer to $60,000. On the upside, a sustained recovery would require renewed inflows and a convincing narrative shift—either through stronger institutional adoption or clearer regulatory signals.
For now, the message from markets is unambiguous. As investors rotate toward assets with predictable cash flows and proven hedging characteristics, cryptocurrencies are being forced to confront a harsher reality. The latest crash underscores a critical point: without broad utility and stable demand, Bitcoin’s claim to safe-haven status remains vulnerable.
Whether this correction proves to be a painful reset or the start of a longer period of consolidation will depend on how quickly confidence returns. Until then, the crypto market appears set for a phase of heightened scrutiny, thinner liquidity and sharper price swings—far removed from the euphoria that defined its recent peak.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
