Bitcoins
The Bitcoin price has been attempting to rebound since Friday morning after it crashed at the beginning of the week.
Bitcoin is a cryptocurrency designed to act as money and a form of payment outside the control of any one person, group or entity.
However, crypto prices are volatile for many of the same reasons other investments are, being supply and demand and how investors react to hype, news and regulatory actions. The main difference between Bitcoin and other investment prices is the magnitude of its price changes.
Who is to blame for the crash this time around? And how long can Bitcoin hold?
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Why the Bitcoin crash?
At the beginning of the week, Bitcoin fell below the key support price of $80 000 and continued to decline from the $109 000 peak seen at the beginning of the year.
Roger Eskinazi, managing partner at Tickmill South Africa, said the decline in Bitcoin was due to US President Donald Trump’s tariffs announcements.
“Risk markets across the board have recoiled heavily, with many gapping lower at the weekly open as traders brace for another week of severe price declines,” Eskinazi said
Bitcoin retreats
Bitcoin started to rebound at 11.15am on Friday, trading at $81 634.09.
Christo de Wit, Luno’s country manager for South Africa, told The Citizen crypto markets gave back much of their recent gains overnight, as risk sentiment turned south following another volatile session on Wall Street.
The retreat follows a short rally sparked by Trump’s announcement of a 90-day pause on newly announced tariffs, an event that briefly lifted equities and digital assets.
“Bitcoin dipped 1.66% but still holds above the psychologically important $80 000 level. Ethereum (ETH) fell further, down nearly 4% at the time of writing,” Eskinazi said.
“Whenever there is a retraction in the market, there is also a lot of fear, uncertainty and doubt accompanied by predictions that Bitcoin is dead, doomed or heading for a crash.
“The crypto market, just like traditional financial markets, is sensitive to macro factors like the recent tariff uncertainty making global headlines.”
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Bitcoin warning
Bloomberg senior commodity strategist Mike McGlone has warned that Bitcoin could crash to $10 000, a level last seen in 2020.
McGlone said: “In 2020, Bitcoin was at $10 000. It was only a few years ago. I think it’s going back there.”
He added that the bear market started when Trump was inaugurated as president. “We are in a bear market in cryptos and we are in a bear market in the stock market.”
The bear market is a market in which share prices are falling, encouraging selling.
“The US just cut off the dependence of the rest of the world exporting to the US for gaining wealth,” he said.
He believes this was the start of cryptocurrency trading below the key support.
Tariffs on imports, potentially exceeding 60% on Chinese goods, threaten to slow global trade, reduce liquidity and push investors toward safe havens like gold.
Is 2025 the year for market bottom?
McGlone said it is difficult to predict when the market bottom will happen, but it could be any time.
“The key thing is if the US stock market keeps reverting lower, that is going to pressure all risk assets, with cryptocurrencies being the riskiest. Bitcoin proves that anybody who bought exchange-traded funds (ETFs) is learning the hard way.”
Bitcoin is not digital gold
He said those who invested in cryptocurrency are proving that they did not find digital gold. They bought more of a value of leveraged beta, which McGlone said is a fact.
“We are going to have massive volatility. But I don’t think the US stock market S&P 500 is going to really stabilise. There is going to be a lot of trading opportunities and one thing to remember about cryptos are their trading machine.”
He suggests the idea that Bitcoin is digital gold should be revisited.
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