Market News

BY  James Warrington

Bitcoin’s entire Trump-era gains have been wiped out after the cryptocurrency was hit by a fresh market sell-off.

The price of Bitcoin dropped sharply over the weekend to around $77,000 (£56,000) as investors fled the notoriously volatile asset.

The losses pushed Bitcoin to its lowest level since last April, when the US president shocked global markets with sweeping tariffs on his so-called “liberation day”.

It signals a reversal of fortunes for Bitcoin after the cryptocurrency surged to almost $125,000 late last year, buoyed by a series of crypto-friendly measures introduced by Mr Trump.

These included easing regulations on crypto assets, passing a landmark law on stablecoins and scrapping Biden-era lawsuits into companies including Coinbase and Binance. Mr Trump has pledged to make the US the “crypto capital of the world”.

The rhetoric and price rally helped to fuel Bitcoin’s status among crypto enthusiasts as a “digital gold” – a safe haven during times of uncertainty.

However, these hopes have largely been dashed in recent months as the cryptocurrency has fallen sharply in the face of Mr Trump’s tariff threats, as well as his threats to seize Greenland and wider geopolitical uncertainty linked to Iran.

Bitcoin has fallen by almost 12pc in the year to date and is down by roughly a quarter since Mr Trump took office for the second time at the beginning of last year.

The latest decline came after Mr Trump selected Kevin Warsh as the new chairman of the Federal Reserve. The move boosted the dollar and eased concerns about threats to the central bank’s independence.

Joe Mazzola, at Charles Schwab, said: “Bitcoin enthusiasts have recently lamented how the cryptocurrency has languished while gold has seemingly ripped ever higher in recent months, punching a big hole in the ‘digital gold’ narrative, one of the core theses for Bitcoin investors.”

The sell-off contrasts to a blistering rally for gold as investors seek safety. Gold surged to record highs of more than $5,600 this week, though prices have pulled back sharply in recent days.

Roberto Rossignoli, a portfolio manager at Moneyfarm, added: “While digital asset enthusiasts championed Bitcoin’s scarcity and decentralised nature, global capital, facing uncertainty, overwhelmingly opted for the proven liquidity, deep market history, and universal acceptance of physical precious metals.”

Bitcoin’s recent struggles have reignited fears of a “crypto winter”, where prices fall dramatically and remain depressed for an extended period of time.

Other popular digital tokens including Ethereum and Solana have also fallen sharply in recent months. The sell-off knocked more than $100bn off the crypto market’s entire value over the weekend, according to data from CoinGecko.

It came as Mr Trump’s own crypto ventures faced scrutiny after it emerged that the president sold a $500m stake in his family’s crypto empire to an Abu Dhabi royal known as the “spy sheikh” in a secret deal just days before the US presidential inauguration.