- Bitcoin recorded its worst weekly performance since November 2022.
- The cryptocurrency has fallen almost 20 per cent in a week and more than 50 per cent from its peak.
- Investors reacted to a major bitcoin holder reducing its position and shifting market sentiment.
Bitcoin has suffered its biggest weekly decline since the collapse of the FTX cryptocurrency exchange in 2022, as investor sentiment turned sharply negative and money flowed into other high-profile investment opportunities.
The cryptocurrency market downturn has pushed bitcoin below $61,000 (£45,000), its lowest level since September 2024. The sell-off has erased almost a fifth of the digital asset's value in a matter of days and left it trading at less than half the record high above $126,000 (£93,000) reached in October last year.
The latest slide appears to have been triggered by a combination of events that unsettled investors.
One of the biggest talking points was the disclosure by Strategy, the world's largest corporate holder of bitcoin, that it had sold a portion of its holdings. While the disposal was worth only around $2.5 million (£1.9 million), it attracted attention because executive chairman Michael Saylor had previously built a reputation as one of bitcoin's most vocal long-term supporters.
The sale represented only a tiny fraction of Strategy's bitcoin holdings, which are valued at more than $50 billion (£37 billion). Nevertheless, some investors interpreted the move as a shift in sentiment from one of the cryptocurrency market's most influential figures.
Competition for investor attention
Market observers have also pointed to growing competition for investment capital.
The planned stock market debut of SpaceX has generated significant excitement among investors. The company is reportedly seeking to raise up to $86 billion (£64 billion) through a public offering that could value the business at nearly $1.8 trillion (£1.3 trillion).
With retail investors expected to participate heavily in the offering, some analysts believe money that may previously have flowed into cryptocurrencies is being redirected elsewhere.
Mark Dowding, chief investment officer for fixed income at RBC BlueBay Asset Management, said in a note, as quoted in a news report, that some digital asset investors appeared to be moving away from cryptocurrencies after a prolonged period of weaker returns.
He suggested the correction highlighted how quickly investor enthusiasm can shift when previously popular assets lose momentum.
Echoes of a previous crypto shock
The scale of the decline has drawn comparisons with November 2022, when the collapse of the FTX exchange triggered a broader crisis of confidence across cryptocurrency markets.
While the current sell-off has different causes, the speed of the decline has revived concerns about the volatility that continues to define the sector.
Whether bitcoin stabilises or faces further losses may depend on investor confidence returning and on whether capital continues to move towards other fast-growing investment opportunities. For now, the world's largest cryptocurrency is once again facing a sharp reminder that sentiment can change quickly in digital asset markets.
