Nearly $1.1 trillion has been pulled from cryptocurrency markets in a matter of weeks as investors lose faith in Donald Trump’s bid to make the US the “crypto capital of the world”.
Bitcoin fell as low as $93,730 on Sunday after hitting a record high above $126,000 just last month, wiping nearly $580bn off the world’s largest digital coin. At one point over the weekend it had erased all its gains this year as the market continued to reel from one of the biggest cryptocurrency crashes in history in October.
Bitcoin was languishing below $96,000 on Monday as investors were still hurting from a liquidation that wiped around £300bn off the value of the crypto market in a span of less than 24 hours last month.
The subsequent downturn has raised questions over Mr Trump’s bid to become the “crypto president”. He sparked a sharp rally in the digital asset industry after his election victory in November last year. However, tokens like his Trump memecoin have endured wild swings, establishing a $9bn valuation just days after its January launch, but falling back to a $1.1bn market capitalisation today.
Stephen Innes of SPI Asset Management said that “a month after its euphoric highs, Bitcoin’s Trump-trade sugar rush faded”. He said “crypto feels like a passenger — not a driver” as global markets are unnerved by the impending deluge of data on the American economy.
Federal departments will begin to publish delayed economic figures after the record US shutdown. Closely watched payroll figures will be released on Thursday. Nvidia, the world’s most valuable company, will also publish its third quarter results on Wednesday, which will be examined for signs of a bubble in the artificial intelligence (AI) industry.
“The sentiment in crypto retail is pretty negative,” Matthew Hougan, chief investment officer at Bitwise Asset Management told Bloomberg. “They don’t want to live through another 50pc pullback. People are front-running that by stepping out of the market.”