Interesting, as I was compiling the market snapshot, so see more substantial falls in the value of currency/commodity Bitcoin.

Reuters has a great take on this, essentially that after surpassing US$126,000 in October, bitcoin has fallen sharply, briefly erasing its 2025 gains.

The abrupt correction from record levels comes in a year that was supposed to cement the cryptocurrency’s legitimacy.

Wall Street has jumped on board, exchange-traded funds have incorporated cryptocurrencies into traditional portfolios, and the Trump administration fully embraced them.

However, the market has pulled back, quickly and without clear cause. Bitcoin’s total value has fallen by about US$600 billion since its October peak, according to data compiled by Bloomberg.

In the crypto world, volatility is to be expected. What’s different this time is how quickly confidence evaporated and how unclear the theories trying to explain it are.

On trading desks and social media, anxiety is growing. Traders review old charts, dust off familiar theories and look for buyers. With no Wall Street manual on how Bitcoin should behave – no stable correlations or proven risk frameworks – many turn to the model they know best: the halving cycle (“halving”) every four years.

That event, designed into Bitcoin’s code, halves supply growth roughly every four years. Historically, it has driven speculative booms followed by sharp crashes, often with a lag, as miners – operators of powerful computers that underpin the network – tend to sell their holdings just as prices deteriorate.

In this cycle, the halving occurred in April 2024. Then came the price peak in October. That roughly fits the traditional pattern. But with high-powered institutional buyers shaping the market, it’s no longer clear that the script still holds.

Here’s Matthew Hougan, chief investment officer at Bitwise Asset Management, who believes prices will rise next year:

“Sentiment in cryptocurrency retail is so negative that there could still be more downside.

“People fear a repeat of the four-year cycle and don’t want to experience another 50% correction. They are anticipating and getting out of the market.”

Some of the damage reflects exhaustion. Many retail investors lost money buying shares of companies that invested in crypto just as prices were at highs. Then, in early October, an unexpected spike in trade tensions triggered liquidations just as leverage had soared. The result was a market full of expectations, but with little conviction and too fragile to resist the fall when the mood changed.

Despite all the talk of institutionalization, the market continues to move on sentiment. And now, negative ones predominate. Risk appetite has waned. Altcoins are falling hard this year, and even Trump’s momentum hasn’t protected the sector from macroeconomic drag or competition with new speculative fads, such as artificial intelligence, stablecoins and prediction markets.

With gold and stocks near record highs, Bitcoin is “the tip of the iceberg of risk assets, and it’s melting down,” said Mike McGlone, senior commodity strategist at Bloomberg Intelligence. “I expect Bitcoin and most cryptocurrencies to continue to fall.”

A reminder, this blog does not constitute investment advice.

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