Bitcoin market rout worsens as investors ‘flood to the exits’
Experts said a perceived lack of action from US President Donald Trump on his pro-crypto promises has led to the slump in value.
Bitcoin’s drastic slump in price deepened on Friday, as a wider cryptocurrency market rout prompted its value to crater by more than a quarter from recent record highs.
The crypto token fell below the 80,000 US dollar (£63,000) benchmark on Friday morning, as most of the gains it had made since Donald Trump won the US election in November were wiped out.
It had peaked at about 109,000 dollars (£86,000) per Bitcoin when Mr Trump was sworn in as president in January, as traders anticipated that his policies would boost its value even further.
But since then, crypto investors have been disappointed by a perceived lack of action on his promises, including an eye-catching pre-inauguration pledge to create a state-run strategic reserve of Bitcoin.
Kathleen Brooks, an analyst at finance firm XTB, said: “We think that a lot of money went into crypto on the hope that Donald Trump would institutionalise crypto when he got to office.
“However, comments about crypto since Mr Trump took over the presidency have been conspicuous by their absence. This could be why investors are flooding to the exits.”
Mr Trump had previously said he wanted to make the US the world’s “crypto capital”.
Crypto is a type of digital money designed to be used over the internet. It does not exist physically, such as dollars or pounds.
You can send and receive crypto with other people – and it is frequently traded for money on platforms called crypto exchanges.
Invented in 2008, Bitcoin is the biggest and oldest token. The next biggest is Ether, better known for the online blockchain network it powers, called Ethereum.
Very few retailers accept crypto as a payment method in the UK, and its real world uses remain limited.
The slump in value has not been helped by Mr Trump’s decision to launch his so-called meme coin last month, a type of crypto with no use other than for fun or financial speculation.
Mr Trump said at the time: “I don’t know much about it other than I launched it, other than it was very successful.”
The token, called Trump, has plunged about 85% in value since a brief early spike, prompting widespread backlash even from those within the crypto industry, where commentators labelled it a stunt.
Bitcoin’s value remains significantly above levels seen even this time last year, when its price was around 60,000 dollars (£48,000).
Nonetheless, David Morrison, an analyst at finance services firm Trade Nation, said the crypto sector is “suffering a bit of a meltdown”.
“It has certainly unwound most of Bitcoin’s gains following Trump’s election win in November, when a much friendlier regulatory environment was promised.”
