Bitcoin bloodbath erases Trump gains

Core Insights - Bitcoin has dropped below $64,000 for the first time since 2024, erasing all gains made after President Trump's election victory, amidst a broader sell-off in crypto and tech assets [1] - The cryptocurrency experienced a nearly 13% decline, marking its largest single-day drop in years, with leveraged traders forced to liquidate positions [2] - Bitcoin's value has decreased by about half since its all-time peak of over $126,000 in late 2025, as skepticism grows regarding the sustainability of price support from pro-crypto policies [3] Market Context - The downturn in crypto coincides with losses in high-growth tech stocks and other risk assets, with the S&P 500 and Nasdaq experiencing declines due to concerns over valuations and slowing earnings growth [4] - The crypto market has lost approximately $2 trillion in value since its peak in October, driven by stock market volatility and weakening sentiment towards cryptocurrencies and tech equities [4] - Liquidations exceeding $1 billion in Bitcoin positions have contributed to downward pressure on prices [4] Investor Behavior - There has been an increase in exchange-traded outflows from U.S. spot bitcoin funds as investors shift towards traditional assets, reducing market liquidity and increasing vulnerability to price fluctuations [5] - The current market phase is characterized by a lack of aggressive institutional buying, with many large investors opting to liquidate positions rather than defend them, leading to a sentiment described as "full capitulation mode" [6] - The ongoing retreat has transitioned into a "crypto winter," indicating a prolonged bear market where prices decline for an extended period and confidence in the asset class diminishes [7]