Bitcoin Plunges to Lowest Level Since Trump’s 2024 Election Win

Bitcoin experienced a significant downturn, falling to its lowest level since Donald Trump’s return to the White House just over a year ago. This decline effectively erased all gains the cryptocurrency had made since the U.S. Presidential election, a victory for a politician who has expressed support for digital currencies.

Market Volatility

The leading cryptocurrency extended a nearly four-month slide, dropping below US$74,424.95 on April 7th, a price point not seen since that date. This dip coincided with initial reactions to President Trump’s proposed tariff plan, which impacted financial markets globally.

Did You Know? Bitcoin had previously risen above US$75,000 following Trump’s re-election, fueled by expectations of policies favorable to the crypto industry.

According to Bohan Jiang, a senior derivatives trader at FalconX, many traders attempted to capitalize on the falling price, anticipating a rebound above US$80,000. However, as Bitcoin continued to decline, these positions were liquidated, further driving down prices.

Broader Market Trends

The recent Bitcoin drop occurred amidst wider market turbulence. A historic decline in precious metals followed a speculative rally, while the S&P 500 retreated from near-record highs due to a sell-off in technology stocks. Simultaneously, gold and silver rebounded, and oil prices increased due to renewed geopolitical risks.

Bitcoin fell as much as 7% to US$72,877 on Tuesday in New York, reaching its lowest point since November 6, 2024, before partially recovering to US$75,800 in early Asian trading on Wednesday. Year-to-date, Bitcoin has decreased by approximately 13%.

Expert Insight: The interplay between macroeconomic factors, geopolitical events, and policy announcements—like those regarding tariffs—demonstrates the sensitivity of the cryptocurrency market to external influences. This highlights the ongoing challenge of establishing Bitcoin as a truly independent asset class.

Despite a White House generally seen as supportive of cryptocurrencies and increasing institutional adoption, Bitcoin has plummeted nearly 40% from its peak in early October. This downturn followed a significant liquidation event on October 10th, triggered by further comments from Trump regarding tariffs, which resulted in US$19 billion in losses from leveraged token bets, a recovery from which the broader cryptocurrency market has yet to fully achieve.

Market Sentiment and Future Outlook

Data from CME and Coinglass indicates a sharp decline in open interest – the number of outstanding futures contracts – over the weekend. The funding rate for perpetual futures, representing the majority of digital asset trading volume, has turned negative, suggesting increased demand for short positions, or bets that the price will fall.

While put options – contracts protecting against downside risk – have eased, price strike concentrations reveal that the market remains anxious. Augustine Fan, a partner at SignalPlus, a Hong Kong-based crypto options platform, stated, “Crypto sentiment is hitting rock bottom.” He added that volatility has finally increased after a year of downward movements as traders scrambled to hedge, with markets operating in bear market mode.

The MarketVector Digital Assets 100 Small-Cap index, tracking the 50 smallest assets within a 100-asset basket, has also fallen nearly 70% over the past year. Altcoins have underperformed Bitcoin and Ether since the two largest cryptocurrencies by market value gained approval for U.S. Exchange-traded products, attracting institutional money. However, those spot ETFs—with a significant portion held by retail investors—experienced billions in outflows in November.

Morten Christensen, a trader at AirdropAlert.com, noted, “Bitcoin continues to trade as a high-beta risk asset, not as digital gold.” He added, “That doesn’t mean the thesis is dead, just not here yet.”

Frequently Asked Questions

What caused the recent drop in Bitcoin’s price?

The price decline was influenced by a combination of factors, including initial reactions to proposed tariff plans from President Trump, broader market turbulence, and liquidations of leveraged positions.

Has Bitcoin’s performance been affected by the current political climate?

Yes, the market experienced a downturn following comments from President Trump regarding tariffs, and the initial price increase after his re-election has been largely erased.

What is the current market sentiment regarding Bitcoin?

Market sentiment is described as “hitting rock bottom,” with increased volatility and a shift towards negative funding rates in futures markets, indicating a greater demand for bearish bets.

What role do you think broader economic conditions will play in the future of cryptocurrency valuations?