Is Bitcoin in trouble?
Bitcoin…What happened?
Is the Bitcoin Bull Run over?
The short answer is most likely not. The bull run that started in January 2023 is probably only halfway through. Bitcoin is up more than 200% since then and has a great chance to continue this run into late 2025. The last few weeks however have seen a sharp decline in Bitcoin from US $72,000 to US $55,000.
While this is great for media, this price movement must be put into perspective. Bitcoin is more volatile than most other asset classes, and these severe swings have become part of its path. If you look at the last bull market, it went up to US $42,000, then went back down to US $28,000. That’s a 30% drop. It then went up to US $58,000 and all the way down to US $43,000, back up to US $64,000, down to US $47,000, back up to US $58,000 and all the way down to US $29,000 before going back up.
The trend seems clear, it’s going up, but 30% downward moves on the way up have become part of it. The question for buyers is if they like this asset for the long term, or if they are looking for short term returns. Fundamentals for Bitcoin have not changed and the outlook is still bullish. The recent sell offs have been triggered by the German government continuing to dump Bitcoin, that they had seized from illegal operations in the past, on the open market and the Mount Cox effect, a Tokyo Bitcoin exchange that by 2014 handled 70% of all bitcoin buys/sells in the world, then suddenly collapsed, and now started to repay creditors. Between the German government and Mt. Cox, there are about US $10 billion in Bitcoin and the dumping is not done yet. We could possibly see another 20% move down to about US $43,000 before a recovery can take place.
For some who have been hesitant to buy Bitcoin, this is a chance to enter at a much lower price than 4 weeks ago. For the people who stay away from it because it’s such a risky asset, it’s a reminder that Bitcoin is not for everyone.
This is not financial advice in any way and not meant to encourage anyone to buy or sell Bitcoin. It is important to be educated about any asset class you invest in, especially if you invest in Cryptocurrency.
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