The past year should have been a great run for Bitcoin (BTC-USD). Congress has been debating new laws to give cryptocurrencies a steady legal home. The sector also managed to avoid the business failures that crashed token prices in the past, such as the shocking collapses of the FTX exchange and the Celsius lending network.
Yet, the original cryptocurrency has lost half its value since its high point in October, when it peaked above $126,000. This slide has dragged it down to price levels last seen in late 2024. While past price drops were worse, shedding up to 80%, this slide feels different. According to Bloomberg, this current downturn is especially painful for long-term believers because it stems from a steady loss of investor interest rather than a sudden market panic.
Wall Street Is Treating Bitcoin like a Regular Stock
When Bitcoin launched in 2009, backers pitched it as an alternative to everyday money controlled by banks and governments. Over time, those transactions proved too slow and expensive, and the price was too unstable to work as real money. Fans then started calling it digital gold, a safe asset that could protect wealth during inflation or political crises.
Large investment firms bought into this idea and poured billions into Bitcoin exchange-traded funds. However, when the recent U.S.-Iran conflict caused global stress, Bitcoin did not hold its value like actual gold. Moreover, interest rates have remained high to fight inflation, and investors realize that holding a token that pays no interest is less attractive. Instead of acting as a safe haven, Bitcoin now trades just like high-risk tech stocks and faces significant competition from prediction markets and AI companies.
Strategy Breaks Its Promise
Crypto fans always watch what the biggest holders do. This past June, Strategy Inc. ($MSTR), the largest corporate buyer of the token, announced it sold 32 Bitcoin for $2.5 million. This was its first sale since the dark market days of late 2022.
The public reaction was incredibly fast. By the end of that week, the token’s price shed more than $10,000, falling below $60,000 for the first time in two years. Strategy holds more than 4% of all Bitcoin in existence, and its Executive Chairman Michael Saylor had spent years promising they would never sell their hoard. The sale was a surprise to many and put a strain on Strategy’s business model.
Politics Has Stalled The Clarity Act
Hopes for clear crypto rules were high when Donald Trump returned to the White House. But the debate over the Digital Asset Market Clarity Act has dragged on so long that people doubt it will ever pass. The bill is supposed to split crypto rules between two different government agencies depending on whether a token acts like a regular product or a stock.
Politics has completely stalled the process. Regular banks do not want crypto platforms acting like shadow banks by paying high yields. Meanwhile, some lawmakers are refusing to support a bill that could enrich Trump, who recently shared that he made $1.4 billion from crypto ventures last year. Law enforcement groups are also worried about a specific section of the bill that would protect software builders from money transmitter laws, fearing it could give criminals a safe place to move dirty money.
At the time of writing, Bitcoin’s price is sitting at $63,155.13.
