Altcoins underperformed, with small-cap index dropping nearly 70% in a year
Bitcoin dropped to its lowest since Donald Trump retook the White House a little more than a year ago, erasing the gains registered by the bellwether digital asset since the election victory of the crypto-friendly US president.
The largest cryptocurrency extended its almost four-month slide, falling below $74,424.95, the lowest price of 2025. That level was seen on April 7 after Trump’s initial tariff plan upended financial markets worldwide.
“A lot of the traders were trying to buy the dip, betting on a rebound above $80,000,” said Bohan Jiang, senior derivatives trader at FalconX. “As Bitcon drifts lower, a lot of those positions have been liquidated putting pressure on prices.”
Bitcoin fell as much as 7% to $72,877 Tuesday in New York, its lowest since Nov. 6, 2024, before regaining some ground to trade at $75,800 early in Asia on Wednesday. It is down about 13% for the year.
Despite a pro-crypto White House and surging institutional adoption, Bitcoin has plummeted about 40% since rocketing to a record in early October. The rout follows a crippling bout of liquidations on Oct. 10 — triggered by additional comments by Trump on tariffs — that wiped out $19 billion in leveraged token bets that the broader crypto market has yet to recover from.
Market Turbulence
Bitcoin’s latest slide comes amid broader market turbulence, including a historic slump in precious metals at the end of last week after their specular rally. The S&P 500 on Tuesday retreated from near records on a tech selloff, while gold and silver rebounded and oil surged on renewed geopolitical risk.
For Bitcoin, the crypto derivatives market is pointing to further weakness with no significant positive catalysts in sight.
The open interest, the number of outstanding contracts, for crypto futures contracts collapsed over the weekend, according to data from CME and Coinglass. The funding rate for perpetual futures, which makes up most of the trading volume in digital assets, has turned negative, meaning there is more demand for bearish bets.
Put options — contracts that protect against downside risk — have eased, but strike-price concentrations show the market has not shaken off its jitters.
“Crypto sentiment is hitting rock bottom,” said Augustine Fan, partner at Hong Kong-based crypto options platform SignalPlus. “Volatility has finally moved up after a yearlong move lower as traders scrambled for protection, with markets trading in bear-market mode.”
Pro-Crypto President
Outside the price tumult caused by tariffs in April last year, Bitcoin had largely stayed above the $75,000 level it reached after the reelection of Trump, who promised policies more favorable to the crypto industry.
But the market has faced persistent downward pressure since the October selloff. Despite a brief reprieve the week of Thanksgiving, with Bitcoin bouncing back nearly 7%, the mood turned sour again in December.
Investor concerns have remained elevated amid economic headwinds and persistent AI bubble fears.
While some institutional holders have held firm, retail participation has faded as major long-term Bitcoin holders have dumped billions worth of the asset.
The MarketVector Digital Assets 100 Small-Cap Index, which tracks the 50 smallest digital assets in a basket of 100 also plummeted almost 70% over the past year. So-called altcoins have largely underperformed Bitcoin and Ether since the two largest cryptocurrencies by market value received US approval for exchange-traded products, attracting institutional money. Yet spot ETFs for those assets — with a significant portion held by retail investors — have seen billions in outflows in November.
“Bitcoin still trades like a high-beta risk asset, not digital gold,” said Morten Christensen, a trader who runs AirdropAlert.com. “That doesn’t mean the thesis is dead — it means it’s not there yet.”
