The Bitcoin market is experiencing decreased demand alongside new initiatives from financial institutions, including a proposal from FHFA to assess cryptocurrencies in mortgage lending.
Declining Demand for Bitcoin
In Q1 2025, demand for Bitcoin fell below -200,000 BTC, with prices dropping below $60,000. This followed a period of rising demand from January to April 2024 when it reached over 200,000 BTC.
Market Liquidations
The market experienced a significant liquidation event amounting to $102 million, where $95.96 million of short positions were liquidated, exceeding long position liquidations by 1533%, which totaled only $6.38 million.
FHFA and Bitcoin in Mortgage Assessments
The FHFA proposed a rule to include Bitcoin in mortgage evaluations. This innovation has the potential to alter asset assessment methods and incorporate cryptocurrencies into credit evaluations.
The decline in Bitcoin demand and new FHFA initiatives indicate the current market volatility, which may influence the perception of cryptocurrencies as financial assets in the future.
