(Bloomberg) – Attempts to decipher exactly what drives the price of bitcoin are often tickling efforts, with multiple catalysts that can be compensated in the mix.
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This seems to be the case these days, since the market observers are trying to unpack the reasons behind the slide that has pulled the original crypto -valute for as much as $ 28% from records of more than $ 109,000 on January 20. The day when the cryptocurrency fan Donald Trump was inaugurated as the US president.
Below are the most commonly quoted reasons for the fall:
Macroeconomic concerns
Bitcoin is not the only property that has fallen in recent weeks. The US stock market also experienced a fall that pushed the Nasdaq 100 index with about 7% of the last record of February 19th. Bitcoin is often considered a “high beta”, which means that supplies will move in one direction, the largest cryptocurrency token will often move even more in the same direction.
Inventories and a harmonized gathering in American treasures are attributed to concern about the potential economic effects of Trump’s plans to impose further tariffs on trade partners.
“This tanning can be observed in response to the macro fears on Trump’s tariffs and geopolitical insecurity,” said Caroline Bowler, Executive Director of BTC Markets, about the recent decline in the price of cryptocurrencies.
The biggest hack ever
The losses that took Bitcoin and the second largest crypto currency, ether, up to months of the lowest lowest lowest lowest lowest lowest metals, happened after February 21, HAKA bybit Exchange. The attack, which is widespread for the Lazarus group North Korea, has drained almost $ 1.5 billion from the exchange.
Not only was it the worst theft ever in the history of cryptocurrencies, but it also shocked the market participants because it aimed at the type of cryptocurrency known as the “cold wallet”, which was considered very safe because it includes hardware that is not connected to the Internet.
“Trust shook after a $ 1.5 billion feature, which is quite a bit of money,” said Zaheer Ebtikar, co -founder of Crypto Fund Split Capital. “I’m sure there are some people who just love each other, ‘You know what? Maybe I can wait a little more.”
Etf leaves
To be sure, there is little tautology involved when connecting the flow of UI outside the agents that are traded on the spot and prices for cryptocurrencies as both can take place for similar reasons.
However, there is an echo effect in the game. As the price of bitcoin declines, investors naturally withdraw money from ETFS that accompany property. Then when these outflows are recorded, a signal sent from the ETF market can cause crypto traders to sell more bitcoin.
The Slump in Bitcoin in February was answered by the largest monthly net outflows for the Spot-Bitcoin ETF group since they were launched in January 2024, with an exodus of about $ 3.3 billion, according to data collected by Bloomberg.
“Hot money that persecutes Bitcoin or any speculative trade expires as quickly as it has come when prices start to fall,” said Michael Rosen, Chief Director of Investment in Angeles Investments.
‘Cash and wearing’ aka base trade
Ebtikar and others said they believed that the resting place of what was known in cryptocurrency as “cash and trade” also played a role in sale. Trade, which is similar to what is known as the basic trade in traditional markets, is a way to profit from the difference in prices between the market of the Spot and Futures.
If prices in the markets of the future trade higher than the video prices, the merchant can sell the future and buy a spot bitcoin and profit on the difference. Still, the traders of the future on CME -in elsewhere remain defensive, with low bibli -futures premiums on exchange. The annual premiums in March decreased to 5.7%, with the daily premium of the next month fell to the lowest seen since last July, according to a report of the K33 Research 25th February.
ETF -American outbursts have been encouraged by mostly arbitration players such as Hedge funds playing basic trade through the future and/or option, “said Mark Connors, founder and main investment strategist in risk dimensions. “Of course, there is a direct seller. But we see most of the profitable ARB opportunities that have appeared in the last fall.”
Trump’s shop is being fired
The prices of many assets that investors believed would benefit from Trump’s return to the White House in the last few weeks. Bitcoin was probably the best “Trump store”, given how he loudly supported the industry on the campaign trail. While the Securities and Exchange Commission rejected many lawsuits and investigations into the Kripto company in Trump’s first few weeks in power, progress on further support was slow, at least in the eyes of some traders.
Trump vowed to create what he called the strategic national supplies of Bitcoin while he was on the trail of the campaign, starting with the chips that the US government had already held after the asset attack. His Republican ally, Senator Cynthia Lummis of Wyoming, followed the Proposal of the Law that required the Government to buy to build a stock of up to one million Bitcoin over five years. Still, not much said about the plan, and the Lummis account did not collect great support in Congress. Trump’s executive order in favor of the industry called for the study of digital supplies, which lacked promises to create a Bitcoin Reserve.
“What has launched this is a lack of positive news about the executive order of some experts who also expected US inflation numbers,” said Paul Howard, Higher CEO of Market Maker Wincent.
On Friday, Lummis suggested that progress on the Bitcoin-Stockpile proposal would probably last longer than many cryptocurrency advocates would like that “my bets that you will see that the state has a strategic Bitcoin reserve before the Federal Government.”
The odds that there are not so big: the legislators in Montana, northern Dakota, south Dakota and Wyoming have voted against establishing a state -level reservoir in the last few weeks, citing concerns about risk and instability associated with digital property.
