Bitcoin experienced a significant drop, losing 4.90% and falling below the $85,000 mark, reaching its lowest value since November 2024.
Record Bitcoin Decline
On Wednesday night, Bitcoin fell by over 4.90%, dropping to $82,242, according to CoinMarketCap. This slump is the largest since August. Currently, Bitcoin is trading at $84,658.
Key Causes of the Drop
The price decline is largely attributed to a $1 billion outflow from U.S. spot bitcoin ETFs, indicating that institutions are unwinding basis trades. Peter Chung from Presto Research highlighted two essential indicators: CME annualized basis and traditional finance funding rates.
Regulatory Issues and Future Prospects
Ether and major altcoins also faced losses. Chris Yu, CEO of SignalPlus, pointed out that the decline in implied bitcoin volatility suggests that speculators are losing confidence in short-term price increases. Following Donald Trump's election, cryptocurrency prices saw increases, but experts predict that comprehensive regulatory systems will take time to develop.
Ongoing regulatory scrutiny creates a challenging environment for crypto prices in the short term, leading investors to question when Bitcoin might resume its upward trend.
