He bitcoin suffered a new setback and fell more than 13% in a single day. In today’s session, the cryptocurrency traded around US$63,000, extending accumulated losses to nearly 50% since October 6, 2025, when it reached a high of US$124,725.
Various factors explain this correction. During his campaign, President Donald Trump had promised a favorable stance towards cryptocurrencies, eliminating regulations that he considered barriers to their development.
However, that expectation was hit after Treasury Secretary Scott Bessent stated before the House Financial Services Committee that the United States Government will not intervene to support the cryptoasset market.
“I don’t have the authority to do it (buy bitcoin or other cryptocurrencies), and as president of the Financial Stability Oversight Council I don’t have that authority either,” Bessent said. After the sharp drop in price, the gains that had been generated after Trump’s election were completely erased.
Added to this is another factor also linked to the president: the recent nomination of Kevin Warsh to succeed Jerome Powell as president of the Federal Reserve (Fed).
Warsh has expressed his intention to reduce the size of the central bank’s balance sheet once he takes office, which would imply less injection of liquidity and, therefore, less demand for high-risk or speculative assets.
Warning
Added to these elements was the warning from Michael Burry, a renowned investor, who argued that the sustained fall in the price of bitcoin could “set in motion a death spiral that leads to a massive destruction of its value.”
“Bitcoin has been exposed as a purely speculative asset and is nowhere near being a hedge against currency depreciation, as gold and other precious metals are,” Burry wrote in his Substack.
So far in February, bitcoin has accumulated a drop of close to 20%, raising its losses for the year to around 28%. Ether, the second largest cryptocurrency by market capitalization, fell more than 7% today, to US$1,973. On a weekly basis, Ether is down almost 14% and around 34% so far this year.
Bitcoin’s biggest crash occurred in 2018, when it fell 74%, driven by fears that the initial coin offering boom had been excessive.
A fifth factor behind the current decline is associated with massive sales by exchange-traded fund (ETF) managers. Deutsche Bank analysts pointed out that these instruments have recorded outflows of billions of dollars monthly since the correction that began in October.
According to the investment bank, spot bitcoin ETFs in the United States recorded outflows of more than $3 billion in January, following withdrawals of approximately $2 billion in December and $7 billion in November last year.
On the Lima Stock Exchange, the IBIT bitcoin ETF, managed by BlackRock, has accumulated a drop of 15.56% so far this year.
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