Bitcoin plunged below $80,000 this week, marking its biggest monthly loss since June 2022. The world’s largest cryptocurrency fell by 17.5% in February, pushing it into a technical bear market. The steep decline has been blamed on rising volatility in financial markets, driven by fears of a global trade war.
There's public distrust in the current system, which is why crypto is inevitable. pic.twitter.com/MRu1LtT6WI
— Coinbase 🛡️ (@coinbase) February 28, 2025
Bitcoin had surged after Donald Trump’s election win in November, fueled by speculation that his administration could create a strategic reserve for the cryptocurrency. However, that optimism has faded as traders wait for the Trump administration’s clear pro-crypto regulatory framework. Investors also cashed out of new Bitcoin ETF products this week, with over $1.1 billion leaving the vehicles on Tuesday alone.
Bloomberg ETF Research Analyst James Seyffart suggested these movements were expected despite the outflows.
#Bitcoin crashes below $85K. What’s next?
Panic selling, record ETF outflows & extreme fear hit the market.#Bitget Research’s Ryan Lee explains what triggered the drop, and if $BTC can bounce back. 👇https://t.co/rRCzQEKmZA
— Bitget (@bitgetglobal) February 28, 2025
“In general, the way ETFs grow is a sort of two (or three) steps forward and one step back,” James Seyffart said. Market experts have predicted more pain ahead for Bitcoin, with some suggesting it could plunge much lower than $80,000.
Traders are currently reassessing the Federal Reserve’s next move amidst increasing inflation, making a rate cut less likely.
Bitcoin has declined 20%. What might it take for the price to reverse course? 🪃 @steven_ehrlich reportshttps://t.co/5WxE8YublB
— Laura Shin (@laurashin) March 1, 2025
Bitcoin loses 17% amid market turmoil
Bitcoin and tech stocks tend to do well in a low-rate environment. The number of states suffering setbacks for their own Bitcoin reserves also grew this week. South Dakota’s HB 1202 bill, which aimed to allocate 10% of the state’s public funds to Bitcoin, was rejected on Monday. Five states have now blocked Bitcoin reserve bills.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the crypto market continues to be battered by negative sentiment. “The bears have been prowling around the crypto market, with bitcoin dropping 20% from its recent peak.”
Analysts point to U.S. President Donald Trump’s growing international trade war driving the latest crypto market sell-off. “The crypto market is currently very edgy, with the number 21 reading on the Crypto Fear & Greed index—marking its lowest level since September,” said Agne Linge, head of growth at decentralized on-chain bank WeFi.
Despite the recent dip, Bitcoin has recovered from sharp monthly falls. In June 2022, its worst month, it dropped 41% before jumping by 26% in July. However, the current economic uncertainty and lack of stability in the short term may continue to put pressure on the cryptocurrency’s price.
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