Bitcoin market sees further decline as investors panic sell

The value of Bitcoin took a steep plunge on Friday, reflecting a broader decline in the cryptocurrency market that saw its worth plummet by over 25% from recent all-time highs. The digital currency dipped below the $80,000 USD mark on Friday morning, erasing most of the gains it had accumulated since Donald Trump’s victory in the US election last November.

Initially surging to around $109,000 USD per Bitcoin following Trump’s presidential inauguration in January, traders had high hopes that his policies would drive its value even further. However, as time progressed, investors were left disheartened by the lack of action on Trump’s promises regarding cryptocurrency, such as his pledge to establish a government-backed strategic Bitcoin reserve.

According to Kathleen Brooks, an analyst at XTB, many individuals poured money into the crypto market with the expectation that Trump would endorse and promote the industry upon taking office. Sadly, the absence of significant commentary on crypto from the Trump administration has led to a mass exodus of investors from the market.

Despite Trump’s earlier statements about wanting to position the US as the global hub for cryptocurrency, the reality seems to be different. Cryptocurrency, like Bitcoin and Ether, does not have a physical form and is intended for online use and transactions. While Bitcoin, developed in 2008, is the most prominent digital token, Ether, which powers the Ethereum blockchain, remains a close second.

The practical applications of cryptocurrencies in everyday transactions are limited, with few UK retailers accepting them as payment. Moreover, the launch of Trump’s meme coin, a crypto lacking utility beyond entertainment or speculative trading, has faced criticism and a considerable drop in value since its initial surge.

Despite the recent decline in Bitcoin’s worth, it still stands higher compared to levels seen a year ago. Despite this, David Morrison, an analyst at Trade Nation, describes the current situation in the crypto market as a “meltdown” due to the reversal of gains made after Trump’s election victory, where a more favorable regulatory environment for the industry was anticipated.

In summary, the ongoing turmoil in the cryptocurrency market, particularly the steep fall in Bitcoin’s value, is emblematic of the uncertainty and volatility surrounding digital assets, worsened by unmet expectations regarding regulation and policy under the Trump administration. Investors are keenly observing how the market will evolve and whether Bitcoin will regain its footing amidst the tumultuous landscape of the ever-changing crypto terrain.