Bitcoin Wipes Out 2024 Gains Amid Shifting Market Sentiment
NEW YORK – Bitcoin has erased its year-to-date gains as market enthusiasm wanes, fueled in part by a shift in investor sentiment following Donald Trump‘s recent policy announcements.The cryptocurrency, which had reached record highs earlier this year, is now experiencing a downward trend after a period of relative stability, analysts say.
The downturn is impacting the broader cryptocurrency market, with smaller, less liquid currencies experiencing notably steep declines. The Market Vector index, tracking the bottom half of the 100 largest digital assets, has fallen by approximately 60% this year.
“What is clear is that the market has chosen a temporary downward trend after a long period of stability,” said Jake Kenes, senior analyst at Nansen.
the pressure is mounting on Bitcoin-related companies. Strategy, a software company that heavily invested in Bitcoin, is seeing its stock price approach parity with the value of its Bitcoin holdings, signaling investor reluctance to continue valuing the company at a premium based on its debt-financed cryptocurrency strategy.
Bitcoin’s volatility throughout 2024 has fatigued investors. The cryptocurrency fell to $74,400 in April after Trump announced tariffs, then surged to record levels before falling again. A particularly sharp downturn occurred on October 10, triggered by Trump’s surprise tariff announcement, resulting in record liquidations.
“The psychological damage suffered by traders in that crash prevents the big players from coming back, and it will take time and a sustained push to rise for manny to overcome this experience,” said Chris Weston, head of research at Pepperstone Group.
The current decline follows a pattern of boom and bust cycles that have characterized Bitcoin since its surge of over 13,000% in 2017, followed by a nearly 75% decline the following year.
Despite the negative sentiment, some investors see the current dip as a buying possibility. “The sentiment among retail crypto investors is very negative,” said Hogan. “They don’t want to experience another 50% decline. People are getting out of the market before that.”
bitcoin represents roughly 60% of the cryptocurrency sector’s $3.2 trillion market value.Chris Newhouse,research director at Ergonia,notes a growing skepticism toward further capital injections and a lack of inherent upward momentum within the market.
