Madrid
Bitcoin is experiencing its worst period in months. The cryptocurrency has registered its largest weekly drop in the last three years and has accumulated a decline of nearly 45% since the highs reached in October.
The downturn comes despite growing regulatory and political momentum for the sector in the United States, surprising a large part of the market that, until a few months ago, celebrated recent price records and the massive entry of investors.
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“We see increasingly difficult to suppose about recovery, especially because it is difficult to justify in an asset that does not have a concrete use,” explains Nicolás López, an analyst at Singular Bank.
The correction has accelerated in recent weeks: Bitcoin has broken through the $70,000 level and has even traded below $61,000, while other cryptocurrencies and companies in the sector are similarly suffering significant losses. Nearly $1.7 trillion has evaporated from the crypto market’s value since the highs last autumn, a figure close to the size of the Spanish GDP.
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“Anyone who invests must be clear about the risks involved. No matter how much support is given, its value is unpredictable. Unless some use is discovered, it will be an asset that will languish,” López explains.
The rise of gold as a safe-haven asset, the increasing complexity and speculation in financial products linked to cryptocurrencies, and the strengthening of the dollar, which is once again attracting investments towards assets considered safer, are all contributing factors. All of this adds to the fraud and scandals that have shaken the ecosystem and rekindle a question already known to the markets: whether this is another cycle or the definitive adjustment of the crypto business.
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Madrid
Bitcoin is facing a significant downturn, experiencing its largest weekly decline in three years as its value plunges nearly 45% from October highs. The sell-off has surprised many in the market, particularly given recent optimism surrounding potential regulatory advancements in the United States.
The cryptocurrency briefly fell below $61,000, after failing to hold above the $70,000 mark, dragging down other digital assets and companies within the crypto sector. The market has shed approximately $1.7 trillion in value since last fall – a figure comparable to the gross domestic product of Spain.
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Analysts are questioning the long-term viability of Bitcoin, citing a lack of inherent utility. “It is increasingly difficult to think about recovery, especially because it is difficult to justify in an asset that does not have a concrete use,” explained Nicolás López, an analyst at Singular Bank.
Contributing to the downward pressure are several factors, including a renewed interest in gold as a safe-haven investment, increased complexity and speculation surrounding crypto-linked financial products, and a strengthening U.S. Dollar, which is attracting investors to more traditional, secure assets. The market volatility underscores the inherent risks associated with cryptocurrency investments.
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The current situation also echoes concerns stemming from recent fraud and security breaches within the crypto ecosystem, prompting renewed debate about whether the current downturn represents a temporary correction or a more fundamental shift. Recent scandals have once again raised questions about the stability and long-term prospects of the crypto market.
López cautioned, “Anyone who invests must be clear about the risks involved. No matter how much support is given, its value is unpredictable. Unless some use is discovered, it will be an asset that will languish.”
