"Reversals of fortune are nothing new for Bitcoin diehards - euphoric rallies, then brutal selloffs. They happen every few years, or whenever sentiment snaps. None of those previous episodes, though, have prepared traders for the speed and scale of the past few weeks, in a reversal that was sharper than expected even if it lacked the systemic stress of prior crashes."
"Bitcoin is still comfortably up since President Donald Trump's November victory, but much of the heady run has vanished in his first year back in office, the very stretch he hailed as crypto's golden age. Most of the losses remain on paper. But for the first time since exchange-traded funds helped bring Wall Street and retail into the market, those positions are under pressure."
"The spark this time around is harder to spot. These new ETFs didn't exist during the last big crypto crash. Investors have pulled billions from the 12 Bitcoin-linked funds this month, Bloomberg data show, with past buyers including Harvard's endowment and several hedge funds. The slew of digital-asset treasury companies - publicly traded crypto holding vehicles, inspired by Michael Saylor's Strategy Inc. - have seen even steeper outflows as investors question the value of corporate shells built solely to hold tokens."
Bitcoin experienced an unusually swift and deep reversal, with prices plunging to about $80,500 and marking its worst month since Terra's 2022 collapse. Approximately $500 billion of Bitcoin value was erased, with additional losses across altcoins. Much of the decline remains unrealized, but positions are under pressure as exchange-traded funds and institutional investors withdraw billions from 12 Bitcoin-linked funds. Public crypto treasury companies inspired by Strategy Inc. faced heavier outflows as investors questioned single-purpose holding structures. Crypto has grown beyond retail holders, becoming embedded in Wall Street and public markets and attracting more price-sensitive participants.
Read at Fortune
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