Crypto market in free fall as Bitcoin plunges below $70,000 while shares in Coinbase and Circle tumble

Major crypto companies are being dragged down with it. Coinbase, the largest cryptocurrency exchange in the U.S., has seen its stock decline by 50% in the last three months and is currently trading around $151. The stock price of Strategy, a company whose raison d’être is to buy and hold Bitcoin, is also down 54% during that time. Meanwhile, the shares of stablecoin giant Circle, which traded as high as $263 following its IPO last June, are now trading at $52. 

The plummeting of Bitcoin and these major stocks is the latest sign that cryptocurrencies are not living up to what was supposed to be a golden age under Trump’s second administration. The president adopted a much more crypto-friendly stance than his predecessor. Following his election, the digital asset industry experienced a surge, which now feels more like a sugar rush. The recent decline began on a fateful day in October when traders lost $19 billion in their crypto positions, and Bitcoin has only kept tumbling from there. 

Crypto was supposed to be a safe haven asset during tough economic times. The tough times have come, but traders have invested elsewhere. Gold, for example, is up 43% in the past six months, as faith in the U.S. dollar weakens—though it too has incurred major setbacks in the last two weeks. Macroeconomic worries stem from stubborn inflation and a weakening job market, among other factors. 

“Poltical uncertainty, including a high probability of a government shutdown in February and the nomination of a more tightening-oriented Fed Chair, encourages investors to delay returning to risk-on assets,” said Beto Aparicio, senior manager of strategic finance at Offchain Labs. 

Bitcoin isn’t the only cryptocurrency to suffer losses. Ethereum is down roughly 42% in the last three months to its current price of about $1,970, and Solana has declined 49% during that time to its current price of about $83. 

Things will only get worse from here, according to traders on prediction markets. On Kalshi, 58% of traders say that Bitcoin will dip below $60,000 at some point in February.